How a Healthcare Discount Plan Works
October 28, 2026
A healthcare discount plan (also called a medical discount plan or discount health card) gives members access to lower prices from a list of participating providers. It can be a useful tool, but it is important to understand exactly what it is, and what it is not.
It is not insurance
This is the most important point. The Federal Trade Commission says medical discount plans are “not a substitute for health insurance” (FTC). The National Association of Insurance Commissioners explains that discount health cards do not pay medical claims; the member pays the provider at the time of service, at the discounted price (NAIC).
| Health insurance | Healthcare discount plan | |
|---|---|---|
| Who pays the provider | The insurer pays part of the bill | You pay, at a reduced rate |
| Where it works | Depends on the plan’s network | Only with participating providers |
| How you pay for the plan | Premiums | Usually a recurring membership fee |
| Regulated as insurance | Yes | No. Some states require licensing or registration |
Sources: FTC, NAIC, Connecticut Insurance Department.
Under Connecticut law, for example, a medical discount plan gives members access to participating providers and “the right to receive services from these providers at a discount,” and the organization that offers it must be licensed by the state (Connecticut Insurance Department).
Why it can help after an accident
For someone recovering from an accident, treatment often involves many visits: specialists, imaging, physical therapy, and follow-ups. A legitimate discount plan can reduce the price of those services with participating providers. Lower medical costs can also mean that less of a personal injury settlement goes to medical bills.
How to use it
- Confirm the provider participates. Before booking, call the provider and ask whether they accept your plan. The FTC recommends calling providers on the plan’s list before you enroll, because some lists can be out of date (FTC).
- Show your membership when you check in.
- Pay the discounted rate at the time of service.
- Keep your receipts. If you have a personal injury case, your attorney will need records of what you paid.
How to spot a legitimate plan
Medical discount plans have been a target of fraud. In 2010, the FTC and law enforcers in 24 states filed 54 lawsuits and regulatory actions against sellers of bogus plans (FTC, 2010). In 2023, the FTC sent nearly $7 million in refunds to 47,166 consumers who were sold discount plans as if they were health insurance (FTC, 2023).
Use this checklist before you sign up:
| Good sign | Warning sign |
|---|---|
| Marketing materials clearly say “This is not insurance” | The seller says or implies it is health insurance |
| You get the list of providers before you pay | The provider list is only available after you buy |
| Details, fees, and refund policy are given in writing | Pressure to sign up now or lose a “special deal” |
| The company is licensed or registered where your state requires it | Requests for card or bank details from someone who contacted you unexpectedly |
| It works alongside your health insurance | Advice to drop your health insurance |
Sources: NAIC, FTC, FTC Consumer Alert, June 2025.
The FTC also recommends asking your state insurance commissioner’s office whether the discount program is licensed (FTC).
The Healthcare PI Discount Plan
Healthcare PI’s discount plan offers savings on doctor’s visits, procedures, and prescriptions with participating providers, with payment made directly to the provider at the time of service. It is not insurance. Contact us to get the details in writing and to find out whether it is a good fit for your situation.
This article is for general information only. A healthcare discount plan is not insurance and does not replace health coverage.
Sources
- Federal Trade Commission. Spot Health Insurance Scams.
- Federal Trade Commission. Is it health insurance or a medical discount plan? Consumer Alert, June 18, 2025.
- Federal Trade Commission. FTC Sends Nearly $7 Million in Refunds to Consumers Harmed by Medical Discount Plans Sold as Health Insurance. November 6, 2023.
- Federal Trade Commission. FTC, State Attorneys General, Insurance Commissioners Crack Down on Bogus “Medical Discount Plans”. August 11, 2010.
- National Association of Insurance Commissioners. Be Careful When Purchasing a Discount Health Card.
- Connecticut Insurance Department. Frequently Asked Questions on Medical Discount Plans in Connecticut.