Health Insurance Services

Most of us know about individual and group health insurance plans. A few more of us have learned about indemnity plans. But in the words of Gomer Pyle who often exclaimed, "Surprise, Surprise, Surprise" other options exist in the health insurance market that are mostly unknown because they are non-traditional types of insurance. Now that healthcare costs are soaring, consumers are looking for ways to cut their health insurance costs without skimping on coverage. In this article we will take a look at two types of insurance products that may fit your healthcare needs.

Healthcare Cooperatives

Healthcare cooperatives are comprised of individuals, families and organizations seeking to find affordable healthcare through the act of cooperation with other such entities. While this seems like a new concept, cooperatives are actually based on the original premise of health insurance. Members are charged a participation fee to be in the cooperative and in turn, those funds are used to pay claims. Other groups are invited to participate in the same coop. The largest coop in existence right now is HealthPartners, Inc.

The benefits of cooperatives are many. First of all, premiums are anywhere from 20 - 50% less than comparable traditional health plans, with no deductibles. Secondly, cooperatives are a lifeline to the local business community by keeping the cost of prescription drugs reasonably priced and enabling community owned non-profit hospitals to remain independent. The larger the cooperative, the more negotiating power it has to parley prescription drug prices as well as medical products. And finally, coops are increasingly effective in improving the quality of home-based healthcare as well as assisted living alternatives by providing educational services as part of their negotiation process with the insurance companies.

Individuals, chambers of commerce and small to midsize businesses that choose cooperative healthcare are the ones most likely to benefit from this type of non-traditional health insurance policy because of the lower rates, comprehensive benefits available and no grouping regulations. Other groups that benefit include seniors, low-income residents and the uninsured that have conditions that are not covered by MediCare or MedicAid. Texas companies that quote and sell cooperative plans are Aetna, Blue Cross and Blue Shield, Unicare, Humana and United Healthcare.

Association Plans

Individuals that are members of an existing association are eligible to participate in an association plan. But what constitutes an association? Legally, an association is "any group of people who have joined together for a particular purpose, ranging from social to business, and usually meant to be a continuing organization. However, it is important to be in compliance with your state's regulations for what qualifies as an association. Here in Texas, the definition of an association is listed in HIPAA 1996, section 2791: a bona fide association must meet the following characteristics:

• It must be formed for a purpose other than insurance
• The members' health status may not be a condition for membership
• Insurance must be available for all members of the association and no coverage may be given to non-members, including affiliate members that may join an association for the purpose of obtaining health insurance
• It must meet "any additional requirements that may be imposed under state law," including having existed for two full years as an association prior to applying for the plan.

Under this definition many organizations qualify as an association besides businesses. These entities may include labor and credit unions; professional, alumni, homeowners' and trade associations; and lodges. Individuals that benefit the most from this type of plan are those that have been denied coverage for a chronic medical condition, such as diabetes or rheumatoid arthritis.

Underwriters rate the members of the association individually on a per household membership. Those individuals that are a higher risk medically will pay a higher premium than individuals that have clean health histories. They differ from group policies in that way. But all members are guaranteed acceptance on the plan and guaranteed renewal each following year.