Desperate Buyer Beware

It was only a matter of time. As persons with chronic health conditions and no insurance coverage become more prevalent and more desperate, the scam artists have emerged.

CNN report recently on the what it calls "fake health plans." These plans, offered without regard to pre-existing conditions or other underwriting issues, purported provide deep discounts on doctor visits, prescriptions and even procedures for a relatively low "one-price-fits-all" monthly payment.

Despite the obvious and suspicious nature of these offers, some consumers are so desperate for care that they send in their money. Too often, they find out too late they have been scammed. Doctors listed in the plan do not accept the plan. Neither do pharmacies. Neither do hospitals. And consumers in need of medical assistance are left even worse off.

Between two and four million consumers have purchased health care discount cards. Not necessarily every plan is a scam. But enough of them are to prompt the Federal Trade Commission and eight states to bring regulatory actions and lawsuits for fraud and deception.

How should you proceed? CNN suggests that if you are considering such a health care card, suspect a scam if the following occurs:

1. You learn of the discount card from a blast fax or Internet popup ad.

The National Association of Insurance Commissioners considers this a red flag that you're about to be scammed. You can read the rest of the warnings on its Web site.

2. They promise a certain percentage savings.

"A 30 percent discount means nothing. Thirty percent off of what?" asked Nancy Metcalf of Consumer Reports.

3. They use the term "guaranteed coverage."

This makes the card sound like insurance, which it's not, says the Coalition Against Insurance Fraud. The coalition also lists other scam alerts on its Web site.

4. They won't give you a list of providers until you sign up.

The discount card company should tell you the providers up front. If they won't, hang up the phone. If they do, call the providers and verify that they take the card.

5. It sounds too good to be true.

"If you've looked into getting regular insurance and gotten a price, and then you find something way cheaper, that's a huge red flag," Metcalf said. "It's cheaper for a reason."