Searching for Medical Coverage?

Searching for health insurance on your own can be a daunting task. One
strategy is to turn to a professional organization or other association
that offers health insurance among its benefits.

That can be a good alternative if the association is a
well-established membership organization set up to offer a range of
benefits and can negotiate group rates from insurance companies. But it
can backfire when the association is made up of loosely affiliated
members who join mainly to buy health insurance.

Many so-called discretionary associations offer few benefits
besides health coverage. Insurance offered by these associations may be
marketed as group insurance, but it's really individual coverage and
does 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 group
in Washington.

"The issue here is that consumers think they're getting
something they're not," says Sonya Schwartz, co-author of the report.

If you buy insurance through an association and your premiums
head skyward, there may not be much you can do besides shop for another
insurer. But there are some steps you can take before you sign up.

First, contact your state insurance department. If the insurer
is a legitimate company, it will be licensed to do business in your
state, says Sandy Praeger, the insurance commissioner for Kansas. But
legitimate -- and licensed -- is no guarantee that you won't be misled
or buffeted by steep rate hikes.

Second, get the policy and read it carefully. Some association
plans have big gaps in coverage, such as limits on hospitalization
benefits that could leave you liable for huge bills. Many states have a
"free look" period of, say, 10 days, during which you can review the
policy and get a full refund of your premium if you cancel.
Unfortunately, association plans may not be covered under such
consumer-protection rules.

Third, use an agent. "We have the knowledge, we're licensed by
the state, and we have to follow the law and know what we're selling,"
says Jackie L. Spragins, an insurance agent in Wichita Falls, Tex., who
is also a former president of the Texas Association of Health
Underwriters.

Consider discretionary-association-plan insurance only as a
last resort. You may be able to afford an individual policy if, for
example, you accept a large deductible and skip prescription-drug
coverage.

Source: Deseret News
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