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Health discount plans face stricter regulation in Massachusetts

Under the new rules, health discount plans will have to make clear that they are not health insurance, Attorney General Martha Coakley’s office announced this week

Organizations that market so-called health discount plans in Massachusetts will have to clearly delineate in their advertising materials that their products are not equivalent to health insurance, Attorney General Martha Coakley’s office said this week.

“Paying for health care can be very difficult and some companies have sought to exploit consumer anxiety and confusion for their own gain,” Coakley noted.

The plans are advertised as a low-cost alternative to health insurance. In reality, though, they offer little more than discounts on medical expenses – and consumers are still on the hook for much of their medical bills.

Coakley’s office said that discount plan marketers will have to establish that the plans require consumers to pay part of their health costs.

Consumers in other states should be wary of health discount plans that seem too good to be true. “Many [discount] cards … can cost [people] far more money than they’re worth,” the Coalition Against Insurance Fraud says.

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Posted: January 28, 2010

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