Buying clubs give discounts on doctors, dentists, prescription drugs

NEW YORK - A rise in the number of uninsured and out-of-pocket medical expenses has spurred several companies to form discount clubs that offer savings on prescription drugs, doctor visits and other medical services.

The buying clubs, set up by companies ranging from Internet startups to Reader's Digest, advertise savings of between 10 percent and 70 percent at participating providers who are willing to offer the discounts in exchange for patients who pay on the spot.

The clubs are aimed at the 44 million uninsured Americans and consumers whose health insurance lacks prescription drug and dental coverage, and other benefits.

But while consumer advocates say the discounts are better than nothing, they caution that membership in a club is not insurance coverage, does nothing to protect against the cost of catastrophic illness and does little to reduce the national problem of rising health costs and growing number of uninsured.

''These discount clubs are not a bad thing, but they only provide limited relief,'' said Gail Shearer, of the Consumers Union, publisher of Consumer Reports magazine.

It is unclear how many Americans have signed up for the health care discount clubs, which typically charge membership fees of $10 to $50 a year. Unlike insurance companies, they are not regulated. But it seems more companies are entering the field and others have expanded their offerings.

Reader's Digest Association Inc. and Merck-Medco, a pharmacy benefit manager that is a subsidiary of the drugmaker Merck & Co., entered the field recently with a joint project. Reader's Digest was attracted to the business after a survey found about 30 percent of its readership lacked prescription drug coverage, said Shirrel Rhoades, a company vice president.

''A lot of people out there are retired or self employed and don't have coverage so they have to pay 100 cents on the dollar for drugs,'' Rhoades said. ''We can save them at least 10 percent to 40 percent depending on the drug.''

Tracy Moulton of Houston said AmeriPlan USA saves her thousands in dental bills. On her own without coverage, the 33-year-old said she was paying nearly $150 for checkups and cleanings, but with AmeriPlan, she now pays $58.

This summer, she had laser eye surgery to correct her vision, and received a $1,000 discount. ''Without the discount there was no way I could afford it,'' she said.

Henry Aaron, a health economist with the Brookings Institution, said any price break is good for people lacking coverage but that the clubs are only a stopgap. Public policy changes are needed to address rising drug costs and rising numbers of uninsured, he said.

''The effect these arrangements have on these problems is trivial,'' he said.

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On the Net:

Medadvantage: http://www.medadvantage.com

Medisavers: http://www.medisaver.com

HealthAllies: http://www.Healthallies.com

AmeriPlan USA: http://www.ameriplanusa.com

Reader's Digest and Merck-Medco: http://www.Yourxplan.com