Health insurance options dwindle for self-employed

Health plans offered by professional associations were once havens for millions of people who couldn't get coverage anywhere else. But as medical costs have soared, groups representing professions as varied as law and golf have been forced to stop offering the benefit or been dropped by insurers.

More than 8,000 people with coverage through the California Assn. of Realtors could be next if Blue Shield of California succeeds with its plan to cancel the group's health coverage.

"It's a real stab in the heart," said Marcy Garber, 62, an Encino real estate agent whose history of breast cancer makes her an almost-certain reject if she seeks similar coverage on her own.

Although no one tracks association coverage to know how many plans have disappeared, the experience of Marsh Affinity Services is telling. A decade ago, Marsh, which brokers and administers the health plans, had 142 such clients. Today, all but three have shut down.

Over the same period, the nation's uninsured population, now estimated at 45 million, rose dramatically, fueled in part by the dearth of affordable options for the self-employed, experts say. Among uninsured workers, nearly 63% are self-employed or work in small firms, Todd Stottlemyer, president of the National Federation of Independent Business, told Congress recently.

Fewer than a quarter of 1,020 professional and small-business associations surveyed in February offer medical coverage, even though a majority of the groups said they would like to. The American Society of Association Executives, which commissioned the survey, views the issue as a crisis.

In its heyday, association health coverage was so popular that brokers touted it as a membership recruiting tool for professional organizations. The demise of the coverage is particularly problematic in states like California, experts say, where a raft of jobs -- including many in the service and entertainment sectors -- don't come with health benefits.

"The association business used to be a huge part of the group health insurance business," said Robert Laszewski, a Washington-based health policy consultant and former insurance executive. "Now, it's like the buggy whip business -- almost entirely gone."