Medical Discount Cards Often Dead On Arrival

ASHEVILLE, N.C. -- Like millions of Americans, business owner Dorsey Ridgely of Asheville, N.C., can't afford conventional health insurance.

"Just for me individually, it was like $250 to $300 a month, so you're talking several thousand dollars a year," says Ridgely.

So when Ridgely heard about Family Care, a medical discount card for only $59 per month, she called to see what discounts were offered.

"We would get discounted dental, doctors, prescriptions and everything we wanted and were looking for," she said.

It was everything and then some: doctor's visits, dental care, eye care, hearing, prescriptions, and chiropractic. It even offered an accident benefit worth $10,000, and a $50,000 death benefit.

Ridgely was sold, but had one more question. "I was like, 'Do you have doctors in Asheville?' 'Yes, we have people already signed up in your area', the group said."

Ridgely paid the $149 sign-up fee to become one of Family Care's "tens of thousands of members." Her first order of business after receiving the card was a much-needed trip to the dentist.

She said what happened next was a shock.

"We were told that the closest dentist was in Charlotte, and we're in Asheville. Charlotte's like a 2½ hour drive," Ridgely said

In addition to the lack of participating dentists in Asheville, WYFF-TV could find no participating doctors on Family Care's search engine.

In fact, the television station called 50 doctors in the surrounding area to see if any of them take discount cards of any kind. The answer was a resounding "no."

"I think this is pure profit motive, and they're selling a product that doesn't cost them anything," said Diane Zeager, business manager at Palmetto Family Medicine.

The Greenville-based practice doesn't accept discount cards of any kind, because their contract with insurance companies excludes the use of such cards. Yet somehow, Zeager said, their name keeps getting on the list.

"It's like, 'Can you take our name off?' And they're like, 'There's nothing we can do, you'll need to contact our corporate office', and you send the corporate office a letter and nothing happens," she said.

Experts worry that people may confuse medical discount cards with actual insurance, even though it says on the card, "This is not insurance."

Experts said while it's one thing to get stuck with a bill at the doctor's office, winding up in the hospital with a medical discount card could be expensive, if the patient finds out too late the hospital doesn't accept it.

Steve Poole, of St. Francis Optimum Health Network, told WYFF-TV, "When you present at the emergency room, once you present, you're under obligation to treat that patient. So it may be after the fact, after you've been discharged or possibly admitted to the hospital, that you may find out the exact nature of your insurance plan."

For example, if the hospital bill is for $20,000, the patient would be responsible for $16,000, provided they receive a 20-percent discount.

But again, Poole said, that's if the hospital accepts medical discount cards.

Ridgley said she couldn't find anyone in her area who would accept her Family Care discount card.

"I totally believe that they lead people to believe they going to get a service they don't get," she said

Family Care, based in Houston, has an "unsatisfactory rating" with the Better Business Bureau, the television station reported. The company logged 105 complaints in a 36-month period.

According to BBB reports, consumers claimed that "their credit cards were charged without their knowledge or permission."

And in April 2004, the New York attorney general found Family Care "failed to truthfully disclose the cost and benefits of their discount card program."

Ridgely said when she tried to cancel her account and get her money back, she was passed from one customer service representative to another.

"You know, they kept passing me, 'Oh, I have to get to my manager.' There were a lot of Mikes, there were a lot of Steves, there were a lot of people," Ridgely said.

She said despite her numerous phone calls to the company, Family Care continued to debit her account for $59.95 for the next six months.

Finally, she was issued a refund for the full amount, but Ridgely said it wasn't easy.

"To me $50 or $60 is literally food off my table," she said.

Family Care of Houston Texas did not return WYFF's phone calls or emails.

Experts said that unlike insurance companies, medical discount card companies are not regulated and monitored by most states. And because they're not regulated, the people who sell these cards do not need to be licensed, nor do they need health care experience at all.

Federal Trade Commission report
AARP article on medical discount plans