Key takeaway
Medical discount plans or health discount plans are an alternative to health insurance. The plan will provide a discount on any medical service required as long as the member gets care from the provider in the discount program.
The key difference between a health insurance plan and a health discount plan for pricing purposes is you will know up front what the care would cost. These plans are not regulated by the ACA but rather they are regulated at a state level.
Medical discount plans vs health insurance
Alternative to health insurance
Discount plans are not health insurance, they are an alternative to health insurance. If you already have health insurance then you will have a built in discount from the network provider and do not need a discount plan. However, a medical discount plan is beneficial if you do not have health insurance or you are looking for medical benefits that are not as expensive as health insurance.
Supplement to insurance
You can consider a medical discount plan in addition to insurance for secondary benefits like pharmacy and dental and vision plans that are not covered by health insurance plans.
Federal vs state mandate for health insurance
The federal mandate for requiring health insurance has been lifted and you will no longer have to pay a penalty. However, five states, namely New Jersey, DC, Massachusetts, California and Rhode Island still impose individual mandates, i.e. they will impose a penalty if you do not have health insurance. In these five states you would need basic health insurance in addition to the discount plan, otherwise you will be penalized when filing your state tax returns. You may however qualify for an exemption.
Medical discount plan summary
Medical discount plans or health discount programs were originally built to create a supplement to health insurance by providing cost effective solutions for benefits not covered by insurance. For example, hospital bill negotiation, dental and vision services, telehealth and more.
However, as the health insurance industry becomes increasingly expensive and rejects claims and increases deductibles, these discount programs have become a supplement to health insurance, providing comprehensive coverage for everyone that requires healthcare.
Learn all about the Vativis medical discount plan