Kansas Insurance Commissioner Sandy Praeger on Tuesday warned Kansans to be on the lookout for companies touting discount cards as substitutes for health insurance.

“Some discount cards are legitimate,” Praeger said, “but they’re just that — they offer discounts. They’re not insurance.”

Praeger, who lives in Lawrence, said her office recently investigated a case involving a woman who had been convinced that she could save money by dropping her health insurance for a discount card.

The woman canceled her insurance coverage, only to discover that the card was insufficient to meet her needs — and that her pre-existing medical conditions precluded her from regaining affordable health insurance.

“We were able to get her back on with the company she’d been with, but it was only because the company chose to cooperate,” Praeger said. “They didn’t have to take her back, and I couldn’t have forced them to.”

Praeger said her office had begun distributing fliers encouraging Kansans to call her office’s Consumer Assistance Hotline — (800) 432-2484 — before “signing anything.”

Both the commissioner’s office and Kansas Atty. Gen. Phill Kline have stepped up efforts to protect consumers.

“We’re doing a good job,” she said, “but rather than wait until after fraud occurs, it’s better to educate the public so it doesn’t happen in the first place.”

Discount cards are not regulated by the Insurance Department because they are not considered insurance, Praeger said. Instead, consumer complaints are referred to the attorney general’s office.

The flier lists three “warning signs” that someone is selling bogus insurance:

• High-pressure marketing, telling customers they “must sign up today.”
• Premiums 15 percent or more below the market.
• Few limitations on coverage.

Such policies often are pitched via media ads, e-mail and bulk faxes.

“They even faxed one of these things to my office, if you can imagine that,” Praeger said.

In the past year, Praeger said her office had opened more than 250 insurance fraud cases.