New York -- For those unfortunates who have to buy their ow health insurance, the first piece of advice has always been, "Join an association." A professional or trade group or an alumni association may offer cheaper coverage than you could get yourself.
But nowadays, that's not always true. Depending on the group, an individual policy just might cost less.
Like every other segment of the health-insurance business, association policies have soared in price. Many big insurers, like Mutual of New York, have quit the business. Some of the newer insurers may start out with an attractive low price, then raise it rapidly. Even if your group-health coverage is low now, it may not be next year.
It's also getting harder to join a group-health plan. To hold prices down, insurers are more likely to exclude people with chronic health problems, to deny coverage for the specific thing most likely to ail you, or to delay insuring your particular illness for up to a year, reports Robert MacDicken of the American Society of Association Executives.
Still, group policies are well worth checking out. If you don't know a trade association with a group plan, go to your library and spend half an hour with the Encyclopedia of Associations. Using its index, look up associations you might be eligible to join. The description of each group will tell you whether it offers healthinsurance.
Associations typically offer comprehensive medical and hospital insurance. If you find that too expensive, even in a group plan, individual-health insurers are touting two alternatives:
(1) Comprehensive major-medical insurance with very high deductibles. Instead of paying the first $250 or $500 of your year's medical bills, you might pay the first $2,000 or more.
Take Benefit Trust's Tele-Med policy. A 39-year-old, nonsmoking HTC male living in Chicago would pay $1,589 a year for a policy with a $500 deductible but only $949 for a $2,500 deductible. In years you're sick, the higher deductible costs you a lot out of pocket. In years you're not sick, the policy is $640 cheaper.
Women, however, might not be able to afford even a policy with a big deductible, due to the higher premiums they're usually charged. A 39-year-old nonsmoking woman would pay $2,108 for a Tele-Med policy with a $500 deductible and $1,249 for one with a $2,500 deductible.
Result of these skewed rates: Women, who generally earn less than men, are more likely to find that they can't afford health insurance. Women are charged more, the insurers say, because they make more claims.
(2) "Major hospital" insurance. This kind of policy covers your bills when you're in the hospital, up to $1 million. But you're not insured for doctor bills outside the hospital.
Mutual of Omaha's MedFlex Major Hospital plan, with a $500 deductible, might cost a 39-year-old nonsmoking man $903. A woman might have to pay $1,234.
The price drops as the deductible rises. For those willing to pay the first $2,000, the price for a man falls to $514 and for a woman, to $702. But you might prefer the lower deductible since -- with this coverage -- you pay all the outpatient bills yourself.
Jonathan Wenger, director of sales promotion for Washington National Insurance, describes major hospital plans as true bare-bones coverage. "I don't know how we can take any more out of the policy," he says. Washington National's plan will be launched in July.
Typically, health-insurance plans pay 80 percent of each insured bill and you pay the other 20 percent, up to a cap of $2,500 or $5,000 (in addition to the deductible). The insurer pays everything over the cap. You can lower your premiums even more by splitting the bills with the insurer 50-50, up to the level of the cap.
As all you skeptics are doubtless saying, even the bare-bones policies are hardly cheap. Too true. The lack of affordable health insurance is one of many tragedies of our time.