Thumbs Down: Scam by Associations

Physician's Money DigestJuly15 2004
Volume 11
Issue 13

There are hundreds of legitimateorganizations that offer healthinsurance as a benefit of membership.There are many others, however, thatexist almost solely for the purpose ofpeddling health insurance and have afinancial stake in the insurers they recommendto their members. A reportby Families USA, a consumer advocacygroup, shows that those who hold suchpolicies often get stuck with hugemedical bills when the policy's coveragedoesn't match the association saleshype. Association insurers may alsolow-ball rates at the outset, and thenstick policyholders with steep premiumincreases. Association policies are frequentlyexempt from state regulations.In light of numerous abuses that havebeen uncovered, Families USA insiststhat this policy must change.

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