The research of a couple of economists based in Iowa City is featured in an article in the current issue of Business Week magazine. Elaine Ditzler, a research associate with the Iowa City-based Iowa Policy Project, says it’s a story about medical discount cards. The Iowa Policy Project did a first-of-its-kind survey to find out if people were confused and thought these relatively-new discount cards were really health insurance.

Ditzler says Business Week editors decided to do an investigation of their own, and came to the same conclusion she and her colleague did — that people were, indeed, confused. Ditzler’s research is quoted in the magazine’s article. Medical discount cards are offered for a monthly fee, which many of the companies call a “premium” and that fuels the misconception that it’s insurance according to Ditzler.

In addition, the discounts — which range from five to 25 percent — are often available to folks who do not sign up and pay for the “discount cards.” “It’s a very new industry and it is booming,” Ditzler says. Industry experts estimate about 20 million Americans now have one of these medical discount cards.
Twenty states have very limited regulations for the companies selling these discount cards, but there’s nothing on the books in Iowa that governs how these companies operate.

Ditzler says industry-watchers believe it’s time to establish the same kind of laws for medical discount cards that’re in place for traditional health insurance.
Ditzler says it’s become a “free for all” and there are no consumer protections available when someone “buys” a medical discount card that’s not legitimate.