Association-sponsored coverage plummets
Health insurance options dwindle for self-employed
Group plans are being dropped or becoming unaffordable to many.
By Lisa Girion
Los Angeles Times
March 27, 2007
A major source of health insurance for people who work for themselves is disappearing, casting thousands of contractors, freelancers and solo practitioners into the ranks of the uninsured with little hope of obtaining new coverage.
Health plans offered by professional associations were once havens for millions of people who couldn’t get coverage anywhere else. But as medical costs have soared, groups representing professions as varied as law and golf have been forced to stop offering the benefit or been dropped by insurers.
More than 8,000 people with coverage through the California Assn. of Realtors could be next if Blue Shield of California succeeds with its plan to cancel the group’s health coverage.
“It’s a real stab in the heart,” said Marcy Garber, 62, an Encino real estate agent whose history of breast cancer makes her an almost-certain reject if she seeks similar coverage on her own.
Although no one tracks association coverage to know how many plans have disappeared, the experience of Marsh Affinity Services is telling. A decade ago, Marsh, which brokers and administers the health plans, had 142 such clients. Today, all but three have shut down.
In its heyday, association health coverage was so popular that brokers touted it as a membership recruiting tool for professional organizations. The demise of the coverage is particularly problematic in states like California, experts say, where a raft of jobs — including many in the service and entertainment sectors — don’t come with health benefits.
“The problem with associations is they go into a death spiral because they get the worst risk,” said Alan Fox, vice president of plan design for the American Psychological Assn. Insurance Trust, which covered thousands of psychologists and their families for 35 years before discontinuing its health plan in 1999.
As havens for people with medical conditions, association health plans are especially vulnerable to rising medical costs, said Janet Trautwein, chief executive of the National Assn. of Health Underwriters.
“Costs are going up everywhere in every type of plan,” Trautwein said. Associations “not only have the normal costs going up, but they have this adverse selection at the same time. It’s a double whammy.”
http://www.latimes.com/business/la-fi-insure27mar27,0,2749192,full.story
Comment:
By Don McCanne, MD
How many more examples do we need? Segregated health insurance risk pools are not effective for financing care of those individuals who have significant health care needs. We desperately need to establish one single risk pool, include everyone, and fund it equitably.
Republicans are well represented in these professional associations, but simply being a Republican will not provide financial security if you have breast cancer and have run out of insurance options. Reform is no longer a partisan issue. Moderates, conservatives and liberals should all have the health care they need, when they need it, without being exposed to the additional burden of financial hardship. We can do this together.