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AG Hearing Looks at Discount Cards

AG Hearing Looks at Discount Cards

October 15, 2009

On Tuesday, October 13, 2009, the Attorney General held a public hearing on proposed regulations on discount health plans and organizations. These regulations are intended to protect consumers from companies who lure consumers with “unscrupulous marketing of plans that claim to offer discounts on medical products or services.” These regulations require discount health plans and organizations to provide consumer protections to the people purchasing the plans. It also requires that the plans make it clear that they are not insurance so that Massachusetts’ residents do not mistakenly purchase them to satisfy our individual mandate. For more details about these regulations, check out our earlier blog post here.

First up at today’s hearing was Charles Joffe-Halpern, Executive Director of Ecu-Health Care in North Adams. He testified that discount health plans advertise in the papers in Berkshire County with the intent to gain more participants. He also said that he called up one of the companies and “I actually called the 800-number and got an operator who was unusually candid with me. She admitted the card did not always provide the discounts they claim to provide and that many elders are particularly upset after they purchase the card, as it provides no discounts to Medicare beneficiaries. Of note, the advertisement shows an elder talking to a nurse on the telephone.” He urged the attorney general to implement these regulations and prevent people from being taken advantage of by “sophisticated con artists”.

Next came HCFA’s testimony, presented by Georgia Maheras. HCFA supports these regulations as an important consumer protection. We highlighted the need for disclosure by these companies so that people know what they are purchasing. The regulations rightfully impose upon discount health plans to provide accurate and crucial product information regarding the products they sell that will allow consumers to make better informed decisions and to better navigate through the complex health care system.

Next was the only opposition testimony of the day, and mild opposition at that. Alan Erenbaum from the so-called "Consumer Health Alliance" represented not consumers, but the national trade association of discount health programs. He said that these plans are enjoyed by millions of Americans and pointed out that the legitimate companies are “crystal clear” that they are not offering insurance. He encouraged the attorney general to make the regulations less-Massachusetts specific because that is a burden to these national companies. He also said that many of these companies do not use email as a means of communication so the requirement to include an email address may be hard for them to comply with.

Erenbaum’s testimony was juxtaposed with that of Audrey Perlow from Health Law Advocates. She asked the attorney general to be more specific in requirements that are Massachusetts-focused. She even said that the regulations should be “crystal clear” about what MCC means for Massachusetts’ residents. She also asked that the regulations provide for monetary relief when a consumer decides within 30 days of enrollment to cancel the discount health plan.

Eric Linzer of Mass. Ass'n of Health Plans was next and he echoed support for these regulations. He said that these regulations strike the appropriate balance between discount health plans and insurers.

Finally, Diane Lawton from the Office of Consumer Affairs offered Undersecretary Barbara Anthony’s testimony in support of the regulations into the record.

We look forward to the implementation of these regulations as a important step in protecting Massachusetts’ residents.
-Georgia Maheras