Disappearing health insurance

By: Peter Viles
By: Peter Viles

The health insurance crisis in America is making it harder and harder for the self-employed to find reasonably priced coverage. In past years, self-employed people often purchased their coverage by joining industry associations that offered group plans, but those plans are disappearing.

Realtor Marcy Garber is self-employed and a cancer survivor for years. Garber bought her own health insurance, at a group rate, by belonging to the California Association of Realtors, so imagine her shock when her carrier, Blue Shield of California, canceled her coverage.

"I got a letter and on the front it said, 'Your Blue Shield insurance is canceled, effective,' whatever. So immediately I thought I'd forgotten to make a premium payment," Garber said.

Garber's shock quickly turned to anger.

"I know the day I got the cancellation letter I went on the Blue Shield web site, and there was an article about how much money Blue Shield had made that year. It made me sick to my stomach," Garber said.

Blue Shield said the realtors failed to live up to their end of a contract, which required that 75 percent of its members who buy insurance must buy it from Blue Shield.

"The fault lies with the California Realtors Association. They allowed their group to get so small as to violate their contract. They also had plenty of time to get replacement coverage," said Tom Epstein with Blue Shield of California.

What's so bad about a small group? If the younger, healthier realtors aren't in it the group might not cover its own costs, which is the whole point of group insurance.

"If you don't have the healthier people subsidizing the people who are less healthy, you're gonna end up with very high rates on those who are less healthy," Epstein said.

The realtors sued and lost. They and Marcy are caught in a national trend: Group insurance policies offered by industry associations are disappearing, because the younger members of those groups either don't buy insurance or find it cheaper somewhere else.

"There is now only 24 percent of associations that are providing health insurance to their members," said John Graham with American Society of Association Executives. "Twenty years ago it would have been closer to 60 or 70 percent."

Garber has beaten breast cancer twice. She knows she'll find insurance somewhere, but she's not sure how much it will cost.

"I'm going to have to do whatever I have to do until I reach the Medicare age, and I haven't found that exact solution yet," Garber said. "I'm looking every day."

Peter Viles for CNN, Los Angeles.

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