After writing my Penny Wise, Pound Foolish post on health insurance, I received an email from Nicole Vincent of the FTC. For those of you who are not familiar, the FTC is the Federal Trade Commission, and they deal with consumer issues. Apparently, there’s a health insurance scam going on right now that she wanted me to tell all of you about, so let me break it down for you.

Health insurance is supposed to work like this: you pay a monthly premium, and in exchange, should you need medical treatment, they will pay for whatever you need to some degree. Some health insurance sucks so it doesn’t cover much, while other health insurance is really good so you can be fully covered in a number of instances. The point, though, is that you are covered no matter where you go. Sure, you may get a discount for going to doctors who accept your insurance, but you go anywhere to get coverage. Your insurance is going to cover you no matter what, even if it isn’t to the fullest extent of charges on your account.

Medical discount plans, on the other hand, are not health insurance, never have been, and never will be. We highly recommend at Queercents that you do not get one of these and do not even consider them. They are eventually worth less money than you pay for them, so save your hard-earned cash.

This is how they work: you pay a monthly premium, and in exchange, they don’t charge you as much for services at their specific clinic or network of offices. Frequently, these operations are not large, so they can only offer coverage in your city, and even more frequently they are only associated with one office. These plans simply don’t make sense. You’re paying less than you would for health insurance, sure. But you’re also getting far less, and it shows. Not only that, but you pay a monthly enrollment fee and then have to pay for most of your equipment and lab costs anyway–rather than just a simple copay to cover your medical visit. On top of that, if you have to receive urgent care–which is the whole damn point of health insurance–you’d have to go to a hospital and pay through the nose for it anyway.

This isn’t just penny wise and pound foolish; this is an outright scam and you will be fleeced for thousands of dollars before you pull the plug. And you more than likely won’t get your money back either, as the FTC’s lawsuits are currently pending. If successful, they won’t necessarily recover everything lost.

If you’d like to learn more, click here.