Thinking About Health columns: Pitfalls of association plans, and a heads-up for seniors about Medicare

Trudy Lieberman

Association health insurance plans -- those offered to members of a local business, social group or trade association -- are becoming more common these days, but consumers should beware of their pitfalls, Trudy Lieberman writes for her Thinking About Health column for the Rural Health News Service, supported by several state newspaper associations.

The plans became less common after the Patient Protection and Affordable Care Act passed because many didn't conform to ACA rules (many were scams). Insurers were no longer allowed to charge women or people in certain occupations more for plans, for example. But rule changes by the Trump administration last year allowed more employer groups and associations to offer such plans, which typically offer skimpier benefits for lower premiums, Lieberman writes.

"According to Kevin Coleman, who has founded associationhealthplans.com to provide facts and figures about the new market, as of early March, 28 plans were being offered in 13 states. Coleman says if there are 50 in 16 states by the end of the year, he would consider that a successful result," Lieberman writes. "Coleman says that so far, plan sponsors claim they typically pay between 23 and 29 percent less to cover those insured than before."

But association plans achieve those savings by excluding people likely to need medical services, not covering things like mental health or maternity, and/or charging high deductibles and coinsurance. "Remember, it’s the interplay among four factors that determines how much your health insurance really costs: the deductible, the amount you pay until insurance kicks in; coinsurance, the percentage of the price of a medical service you pay yourself; the copayment, a flat amount you pay for a service; and the premium," Lieberman writes. "Too often people look only at the premium."

In another recent column, Lieberman reminds readers that seniors have until March 31 to make changes to their Medicare plan."It’s also a good time for those who will soon be turning 65 to begin thinking of their options and learn what the rules are once they make their selections," Lieberman writes. "Until the end of March, if you have a Medicare Advantage plan, you are allowed to switch to another Medicare Advantage plan. Or you can drop a Medicare Advantage plan, return to traditional Medicare and buy a Part D stand-alone drug benefit, says Tricia Neuman, a senior vice president of the Kaiser Family Foundation and a Medicare expert."