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HEALTH PLANS/POLICY: Individual association problems

Nothing really new here, but a nice piece from Lisa Girion in the LA Times about how because of the haste of insurers to avoid association groups and insure the young healthies, said groups are going into death spirals. And of course being kicked out by their plans if they can possibly figure out a reason in the fine print to do so. Today’s bete noir is Blue Shield of California which is kicking out the Association of Realtors on a technicality, but they’re obviously all at it.

Which of course means that if you’re in one of those association groups and yours get terminated and you’re sick, you’re screwed. I thank my lucky stars that when this happened to me, I was able to fool one plan into thinking that I’m healthy enough to be worth having. So far, one year later I have no claims, so they’re up!

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C. Steven TuckerStella BaskombTimjdDon 1 Recent comment authors
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C. Steven Tucker
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I have been a health insurance broker for over a decade and every day I read more and more “horror” stories that are posted on the internet regarding insurance companies not paying claims, refusing to cover specific illnesses and physician’s not getting reimbursed. Unfortunately, the reality is that insurance companies are driven by profits, not people. If the insurance company can find a legal reason not to pay for something, chances are they will find it, and you, the CONSUMER will suffer. However, what many people fail to realize, is that there are very few “loopholes” in an insurance policy.… Read more »

Peter
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Peter

Stella, I tried to research some graphs on cost increases in europe compared to the U.S. The one I was able to come up with (Century Foundation) did not show what you state. Costs are going up world wide but the rate of increase in other countries is less than the U.S. The U.S. also started out at a higher cost rate and from what I’ve seen this will continue. Are you saying that Western Europe and the U.S. health costs will at some point meet each other? I’ll look at your references. As to the the cost of a… Read more »

Stella Baskomb
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Stella Baskomb

“they are controlled much better. Look at every government run single pay system” OK, look at Western Europe. For years, most of those countries have had higher growth in their health care costs – per capita – than the U.S. “Much better control”? Besides, if the reason we need universal health insurance to give the government more power to cut health care spending, somebody has to inform the public that instead of more health care, we’re gonna get less. Who’s gonna do that? When? Oh, yeah – “20% of GDP. Think you’ll be able to afford it then?” I don’t… Read more »

Tim
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Tim

Don, What I was getting at is the basics of the promises made by those who provide them, and what they are getting for their money. They promise “reduced” premiums, supposedly by dealing in “volume”. Wrong. Tell that to GM who is fully insured with THOUSANDS of members and still has a family rate of well over $1000 a month for their plan. Discount? I don’t think so. Even those who are partially or fully self insured with “association plans” could do better. And those who are unhealthy and are in an association? If they have a spouse who has… Read more »

Peter
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Peter

Stella, cost don’t away with healthcare paid for with tax dollars but they are controlled much better. Look at every government run single pay system and you will see how costs are a lot less. No body has problems with the U.S. system except cost, which seems to be advancing to 20% of GDP. Think you’ll be able to afford it then?

Stella Baskomb
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Stella Baskomb

“Any healthcare reform has to openly discuss costs. ”
Oh, yeah?
Then why doesn’t THIS country openly discuss costs? Why does THIS country pretend those costs go away if they are paid with tax money?

Peter
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Peter

jd, I think you are right that Americans don’t understand the connection between lifestyle and good health. Part of the problem is the complexity of the interaction of genetics, pollution, toxins, food, stress, and health problems. The media does not help either when they keep contradicting health advice, coffee good, coffee bad, chocolate good, chocolate bad. All this and the fact that most docs know squat about these relationships as well, and only want to turn patients and increase billings, and you get the fatalist view that nothing makes any difference because no one knows anything anyway. My recent experience… Read more »

Don 1
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Don 1

– Associations served a purpose for many years. When I first got into this business in 1968 the smallest group plan that could be written was 10 lives. Everything under 10 went into an Association type plan. They gave access to group coverage to thousands of people who would not have had a chance for group coverage. A joke no, options only apply to the healthy, individual coverage is cheaper thaqn group because individual coverage can select, they can rider out, so as long your healthy it’s great, and that is an other reason that Assocition plans fail. Community rating… Read more »

Tim
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Tim

Associations are a joke anyway. The carriers let everyone believe that “volume = discount”. Wrong. They promise you a small percentage of a rate decrease… like you would ever know what your “normal” rate would be anyway. It’s a joke. I have a partner who is a tax attorney who shows realtors and others who are self employed how they can have a great insurance plan, and take it all off schedule C. He speaks across the country to groups or realtors. Associations are a joke, plain and simple. If they just knew their options, they’d be po’d (and they… Read more »

jd
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jd

There’s another dimension to the death spirals that hasn’t been discussed. Some (many? all?) of these associations were relatively loose about who they allowed to sign up under the group rates. You’d think it would be only professionals in the organization as well as immediate family members, but I know that at least in some cases friends and distant relatives were allowed to get in on the group rates. Of course, the people most motivated to do this were those who couldn’t get affordable insurance by other means because they were deemed poor risks. This tendency to attract poor risk… Read more »

Don 1
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Don 1

Association went into it’s death spiral in the Mid 90’s with the advent of small group reform and Hippa. My personal experience with them as an underwriter is that most most bad risks to start off with. They are expensive as hell to administer and police and the good risks abandon ship when you ask for a rate adjustment, but the bad ones have no place to go. I think the only carrier that I have seen with Assoction business is the Blues and Prhaps a carrier or 2 who were trying to get into the business. The animal doesn’t… Read more »

Eric Novack
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The AHP/ SBHP legislation would have been a good thing- as it would have the potential to reduce the stranglehold that a few insurers have on the entire health payment/ health insurance market.

Chris
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Chris

<blockquote<insurance industry continues to grow the uninsured population, continually looking for more profitable markets Its about costs. Yes, a successful company will look at where is expenses are going and look to reduce those but when all is said or done, its about costs. The more costly healthcare is, the higher the premiums, the more uninsured. Any healthcare reform has to openly discuss costs. My suggestion for a first step is “pay for what is proven to work (as a first priority)”. We’ve just discoverd how much money has been spent on ultimately ineffective stents. And now we’re about to… Read more »

Peter
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Peter

The insurance industry continues to grow the uninsured population, continually looking for more profitable markets. This eventually will be the best support for single pay as the uninsured population grows to a point that it has voter clout. But I think the present push for state mandatory coverage, always within the present insurance model, will give the insurance industry a few more years of profits at the expense of premium payers. People will come to realize that their costs are not going to go down and will want a completely new system.