Looking Into an Association Health Plan? Make Sure the Deal Is Legit, Meets Your Needs
A number of state medical associations, bar associations, chambers of commerce, and associations for people with similar interests or hobbies, offer insurance to members. But before you sign up for one of these plans, make sure it’s right for you.
To be eligible for one of these plans, you must join the association offering it. That typically involves paying a membership fee, and proving you meet entry requirements for the organization. Once you're a member you can enroll in health plans offered through the association.
Experts say the premiums can be cheaper and the benefits better than if you purchased coverage on your own because of the associations bigger market clout and negotiating power with insurers. But the cost and quality of coverage and the recourse available to consumers who feel they've been wronged can vary substantially, as insurance sold in this way tends to be more loosely regulated.
Be careful when choosing an association like plan. The most prevalent way to sell phony insurance continues to be through real or bogus associations.
Between 2000 and 2002, 144 scams left more than 200,000 policyholders with more than $252 million in medical bills, according to a 2004 report by Congressional investigators.
In July, MEGA Life and Health Insurance Company, Mid-West National Life Insurance Co. and Chesapeake Life Insurance Co. – legitimate licensed insurers – agreed to pay $20 million to settle violations found by regulators in 29 states. The violations were related to health coverage the companies sold through the National Association for the Self-Employed, Americans for Financial Security, and the Alliance for Affordable Services. Investigators say the companies' insurance agents didn't adequately explain what the policies covered.
– By Ed Coury, Senior Editor and Midwest Bureau Chief for the Wall Street Journal Radio Network, Dow Jones & Co., and a reporter for WWJ Newsradio 950.
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A number of state medical associations, bar associations, chambers of commerce, and associations for people with similar interests or hobbies, offer insurance to members. But before you sign up for one of these plans, make sure it’s right for you.
