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The state has seen an increase in discount medical plan programs, whereby consumers pay a fee in order to receive reduced fees from particular health care providers as an alternative to regular insurance.
Unfortunately, state officials have seen an increase in dishonest health discount cards as part of the influx.
To that end, any company selling medical plan programs must now be licensed by the state and they cannot sell themselves as insurance companies, which they are not, state legislators said.
Gov. Jack Markell signed Senate Bill 228, an act that establishes a regulatory system for medical discount plans, into law Monday, Aug. 30 in Dover. These are plans sold to individuals to give them a discount on medical services with certain health care providers.
“Some consumers have been misled into believing that they are purchasing health insurance when they purchase medical discount plans, and other consumers have complained that the benefits they received from purchasing their medical discount plans were not what they were promised at the time of purchase,” SB 228 reads in part.
Scammers offer “fake insurance” so that they can collect premiums only to turn around and fail to pay legitimate claims, Insurance Commissioner Karen Weldin Stewart said. That leaves residents with a myriad of headaches dealing with the medical providers who serviced them.
Consumers should be able to “purchase medical discount plans as an alternative to health insurance, but only when the terms of purchase are fully and fairly disclosed,” sponsors of the legislation wrote.
Heretofore, these medical discount plans operated in the Diamond State unregulated. They will now be under strict oversight, Stewart said. Among other things, anyone who desires to do business in Delaware as a discount medical plan organization must obtain a license from the insurance commissioner.
In addition, organizations must provide core documents, such as the articles of incorporation, a list of the board of directors, company executives and any person or entity owning or having the right to acquire preferred stock.
State Sens. Patricia Blevins (D-Elsmere) and Harris McDowell (D-Wilmington North), State Reps. Bryon Short (D-Brandywine Hundred) and Gerald Brady (D-Wilmington West), who all sponsored the bill, and Stewart attended the bill signing.
“While some discount health cards may provide valuable, money-saving benefits for people without health insurance, the number of deceptive and fraudulent discount cards are growing at an alarming rate and exploiting our citizens during these challenging economic times,” Stewart said.
The state has seen an increase in discount medical plan programs, whereby consumers pay a fee in order to receive reduced fees from particular health care providers as an alternative to regular insurance.
Unfortunately, state officials have seen an increase in dishonest health discount cards as part of the influx.
To that end, any company selling medical plan programs must now be licensed by the state and they cannot sell themselves as insurance companies, which they are not, state legislators said.
Gov. Jack Markell signed Senate Bill 228, an act that establishes a regulatory system for medical discount plans, into law Monday, Aug. 30 in Dover. These are plans sold to individuals to give them a discount on medical services with certain health care providers.
“Some consumers have been misled into believing that they are purchasing health insurance when they purchase medical discount plans, and other consumers have complained that the benefits they received from purchasing their medical discount plans were not what they were promised at the time of purchase,” SB 228 reads in part.
Scammers offer “fake insurance” so that they can collect premiums only to turn around and fail to pay legitimate claims, Insurance Commissioner Karen Weldin Stewart said. That leaves residents with a myriad of headaches dealing with the medical providers who serviced them.
Consumers should be able to “purchase medical discount plans as an alternative to health insurance, but only when the terms of purchase are fully and fairly disclosed,” sponsors of the legislation wrote.
Heretofore, these medical discount plans operated in the Diamond State unregulated. They will now be under strict oversight, Stewart said. Among other things, anyone who desires to do business in Delaware as a discount medical plan organization must obtain a license from the insurance commissioner.
In addition, organizations must provide core documents, such as the articles of incorporation, a list of the board of directors, company executives and any person or entity owning or having the right to acquire preferred stock.
State Sens. Patricia Blevins (D-Elsmere) and Harris McDowell (D-Wilmington North), State Reps. Bryon Short (D-Brandywine Hundred) and Gerald Brady (D-Wilmington West), who all sponsored the bill, and Stewart attended the bill signing.
“While some discount health cards may provide valuable, money-saving benefits for people without health insurance, the number of deceptive and fraudulent discount cards are growing at an alarming rate and exploiting our citizens during these challenging economic times,” Stewart said.
The new law gives Delawareans a tool needed to ascertain whether a plan they are considering is legitimate and provides real benefits, said Stewart, who went out of her way to credit Lt. Gov. Matt Denn for helping to get SB 228 passed. If Delaware residents can detect a plan is fraudulent, residents do not get caught in the trap of having bought into a plan only to find out it is a sham when they have filed a claim, she added.
The new law will provide a level of protection for the consumer while making it easier to go after fraudulent operations for not having a license rather than the more difficult, expensive and time consuming task of proving fraud, state Department of Insurance spokesman Elliott Jacobson said. It ensures that entities that offer medical discount plans fully and fairly disclose to the consumer what they are purchasing and applies oversight to the companies by requiring them to be licensed by the Department of Insurance.
