Department of Commerce and Consumer Affairs

[INS]

We have received inquiries about plans that look and sound like insurance, but are NOT insurance. Information about these plans is being obtained through unsolicited faxes, ads in newspapers, flyers, and farmers markets.

Many of these plans use language that make them sound like insurance, but the product being sold is NOT insurance. Many of them are discount card programs.

Discount card programs sound enticing because they are low-costing and they offer a wide range of coverage options. What makes them sound even better is that they accept everyone regardless of age, gender and pre-existing conditions.

Discount card programs are different from insurance because they do not pay providers, doctors, hospitals, and labs. People who sign up become members of the program and usually must pay some type of monthly or annual fee. Members can then see a participating provider to receive services at a discounted rate. This discounted rate is the amount negotiated between the discount card program and the participating provider. Members must receive services by a participating provider to receive the discount. Members are responsible for the full charge, nothing will be paid by the discount card program.

Because discount card program plans are not insurance, the Insurance Division does not regulate them and has no jurisdiction over them. To those who choose to purchase plans from discount card programs, the Insurance Division cannot provide the same protections offered to those who purchase insurance from companies licensed to sell health insurance in Hawaii.

Here are the Guidelines for Choosing Health Plans:

Check to ensure the company and agent are licensed in Hawaii. This can be done by contacting the Insurance Division at (808) 586-2790 or by checking the Insurance Division’s website www.hawaii.gov/dcca/ins, click on Consumer and then Insurance License Search.

If the company is not licensed it may be operating illegally and there is no guarantee you will receive the benefits promised if you get sick or injured.

Ask for a list of participating providers. Check to ensure that there are participating providers in your area that you can utilize. Since we are an island state, make sure there are participating providers on your island.

Ask doctors, dentists, and pharmacies you use and are familiar with if they participate or know of anyone who does and what their experiences have been.

If you are required to get your doctor to be a participating provider, consider looking elsewhere for coverage. Legitimate companies establish their own connections, it’s part of what they are in business for.

Ask the company or agent if the plan is insurance. If the answer is yes, ask for the name of the company underwriting the plan. Check with the Insurance Division to make sure the plan is licensed.

Ask the company or agent how the plan works, how will benefits get paid and how much will be paid. Giving examples of possible scenarios may be helpful such as “If I have a heart attack and need to be operated on and must stay in the hospital for 2 weeks, how much will be covered?”.

Ask the company or agent for a list of exclusions and limitations as well as for a list of what is covered. Generally, if they say “everything is covered” or “there are no exclusions”, it is usually not insurance, but is a discount card program.

If the agent asks for your credit card number before providing information regarding the plan, DO NOT give out this information. This may not be legitimate.

Remember that if it sounds too good to be true, it usually is. If you are considering purchasing coverage through a company you are unsure of, contact the Insurance Division at:

(808) 586-2790

Or log onto www.hawaii.gov/dcca/ins