Posted by ewing2surf on 3/27/07 1:23pm
Msg #182209

(OT) HEALTH INSURANCE OPTIONS DWINDLE FOR SELF-EMPLOYED

The Los Angeles Times - By Lisa Girion, Times Staff Writer -

Mar. 27: 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.

Over the same period, the nation's uninsured population, now estimated at 45 million, rose dramatically, fueled in part by the dearth of affordable options for the self-employed, experts say. Among uninsured workers, nearly 63% are self-employed or work in small firms, Todd Stottlemyer, president of the National Federation of Independent Business, told Congress recently.

Fewer than a quarter of 1,020 professional and small-business associations surveyed in February offer medical coverage, even though a majority of the groups said they would like to. The American Society of Association Executives, which commissioned the survey, views the issue as a crisis.

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 association business used to be a huge part of the group health insurance business," said Robert Laszewski, a Washington-based health policy consultant and former insurance executive. "Now, it's like the buggy whip business almost entirely gone."

Insurance carriers began pulling out of association markets about 10 years ago amid mandates requiring the groups like employers to offer coverage to all members who wanted to buy it, regardless of preexisting conditions. Unlike employers, however, who typically pick up the much of the premiums for employees, most associations do not share in the costs. Instead, they arrange for their members to purchase coverage at group, rather than individual, rates.

In today's marketplace, that's almost always a better deal for older members and often the only option for people with preexisting conditions. But insurers are eager to sell individual policies to the young and healthy for as little as $100 a month, scooping the cream off the risk pool. That leaves higher-risk older and less-healthy people to the group market, resulting in what is known as adverse selection.

As healthy members leave an association health plan, the concentration of members with higher-than-average medical costs increases. That forces the underwriter to raise premiums. A "death spiral" sets in, when medical costs exceed the plan's ability to raise premiums to cover them.

"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.

The list of casualties also includes health plans once sponsored by the American Bar Assn., which still hopes to resurrect the benefit it dropped last year, and the California Bar Assn., which lost its coverage when its insurer pulled out in the early 1990s.

Before the Professional Golfers' Assn.'s health plan ran into the rough, the group had extended coverage to about 1,000 members. But the plan was discontinued in 1996 as medical costs rose and younger, healthier members bought coverage on their own at lower rates.

"If you can get cheaper coverage through the individual market, that's what you do," said Mila Kofman, an associate research professor at Georgetown University's Health Policy Institute.

But not everybody can buy an individual plan. In many states, including California, insurance companies are allowed to reject applicants for individual policies for any medical reason, including common conditions such as asthma and varicose veins. As a result, many people who lose association coverage in effect become uninsurable.

Insurance options of last resort COBRA conversion coverage, whose name is an acronym for the federal legislation that created it, and publicly subsidized high-risk pools are not for everybody because the coverage is insufficient or unaffordable or both.

"If they don't have an opportunity to go to another group and have to go into the individual market, it's a real problem," said Kansas Insurance Commissioner Sandy Praeger, president-elect of the National Assn. of Insurance Commissioners.

That's what worries Garber, the Encino real estate agent. Garber doesn't know what she will do if she loses her coverage, which costs her $596 a month.

"I'm not what I would call every insurer's delight," she said. "I have to be in a group plan or I'm not going to have insurance. It never dawned on me I'd have any problem with this insurance."

Reply by ewing2surf on 3/27/07 1:27pm
Msg #182212

Re: (OT) STUDY SHOWS GROWING NUMBER OF STATE-MANDATED

HEALTH BENEFITS

BestWire Services -

Mar. 26: A report compiled by the Council for Affordable Health Insurance said the number of state-mandated health benefits continues to climb, and one of the report's authors said policy-makers should keep that in mind when trying to combat the high cost of health care.

CAHI's 2007 "Health Insurance Mandates in the States" found the number of state-mandated health benefits rose to 1,901 nationwide this year, up from 1,843 last year. The report lists common benefits like those mandating coverage for mammograms and diabetic supplies true in most states to rarer benefits like those mandating coverage for Wilm's Tumor, an infant kidney cancer, or those requiring minimum hospital stays for procedures like hysterectomies or testicle cancer treatment, which are mandated in only a handful of states.

Policy-makers may have their hearts in the right place, study author Victoria Craig Bunce said in an interview, but adding more mandates raises the cost of health insurance to the point where policies can become too expensive meaning that, instead of having health insurance that doesn't cover, say, dental care or a chiropodist, some people might not have any coverage at all.

"This is all well-intentioned, but when you start pricing the policies out of people's reach, it doesn't matter," Bunce said. "If they can't afford the policy, what good is it?"

The report doesn't target any particular mandated benefit, Bunce said. "It's a guide to legislators. We're saying, before you enact legislation, here are the costs. Is it really worth it? We're just asking legislators to be cautious."

In a statement, CAHI's director, Merrill Matthews, said it was ironic that policy-makers "continue to pass laws that drive up the cost of coverage and make policies unaffordable for millions of Americans" at a time when they are also trying to reduce the number of those without health coverage.

In the report, CAHI defined a health insurance mandate as "a requirement that an insurance company cover specific health-care providers, benefits or patient populations." Based on their analysis, CAHI said mandated benefits add from slightly less than 20% to more than 50% to the cost of health insurance, depending on the state. Bunce said the figures were generated by taking mandate bills and having health actuaries estimate how much each mandate adds to the cost of a policy.

Mandates make health coverage more comprehensive, but they also make the coverage more expensive, the report said: "Mandating benefits is like saying to someone in the market for a new car, if you can't afford a Lexus loaded with options, you have to walk. Having that Lexus would be nice, as would having a health insurance policy that covers everything one might want. But drivers with less money can find many other affordable options; whereas when the price of health insurance soars, few other options exist."

Some legislators, however, "seem to be getting the message," Bunce said, as about 30 states now require that a health benefit mandate's cost be taken into account before it is implemented, and nine states now allow for "mandate lite" policies, where some individuals can buy a policy with fewer mandated benefits at a lower cost.

Reply by Vince/KS on 3/27/07 2:35pm
Msg #182223

see your pm

Reply by NCLisa on 3/27/07 8:22pm
Msg #182295

I'd love to find an Assoc to join that still has group

insurance! I'd love to be insured!

Reply by JanetK_CA on 3/28/07 12:47am
Msg #182322

Thanks for sharing this, Joe, although it's depressing as he!!... I'm one of those with very poor coverage for a great deal of money, but after reading this, I'd be afraid to change, for fear of losing *all* coverage and not being able to get it again. This issue seems to be growing to crisis proportions in this country. (I wish *I* was only paying $596/mo, like Garber in the article!!) Ah, well......