Searching for health insurance on your own can be a daunting task. Onestrategy is to turn to a professional organization or other associationthat offers health insurance among its benefits.
That can be a good alternative if the association is awell-established membership organization set up to offer a range ofbenefits and can negotiate group rates from insurance companies. But itcan backfire when the association is made up of loosely affiliatedmembers who join mainly to buy health insurance.
Many so-called discretionary associations offer few benefitsbesides health coverage. Insurance offered by these associations may bemarketed as group insurance, but it's really individual coverage anddoes not provide the protections of traditional group plans. Plus,associations often dangle enticing teaser rates that soon disappear,according to a recent report by Families USA, a consumer-advocacy groupin Washington.
"The issue here is that consumers think they're gettingsomething they're not," says Sonya Schwartz, co-author of the report.
If you buy insurance through an association and your premiumshead skyward, there may not be much you can do besides shop for anotherinsurer. But there are some steps you can take before you sign up.
First, contact your state insurance department. If the insureris a legitimate company, it will be licensed to do business in yourstate, says Sandy Praeger, the insurance commissioner for Kansas. Butlegitimate -- and licensed -- is no guarantee that you won't be misledor buffeted by steep rate hikes.
