What happens when good people get bad health insurance? Read one organization's story of claims denied and learn how you can avoid becoming the next victim of unscrupulous, poorly managed AHP and MEWA health insurance.

The National Writers Union (NWU) represents freelance writers, offering its members professional support and health insurance. NWU contracted with Employers Mutual, a MEWA or multiple employer welfare arrangement. MEWAs, similar to proposed Association Health Plans, are designed to allow small unions like NWU, associations, or business groups to offer their members or employees lower-cost health insurance benefits.

As good as it sounded, for the NWU and its members, the decision to join a MEWA proved to be a costly mistake that was too good to be true. "They were getting the royal runaround," according to representative Al Weinrub, "You know, wrong numbers, no cards, no description of the plan." (ABCNews.com, March 6, 2002). And, as problems mounted, so did unpaid health claims for members - up to $100,000 - in some cases.

Key executives of Employers Mutual were eventually charged under a federal indictment for collecting some $14 million in healthcare premiums, while covering just $3 million in beneficiaries' claims. Executives allegedly kept the balance, ignoring millions of dollars in medical claims that went unpaid. The problem? The absence of consumer protections that would have shielded the union and its members from unethical or poorly managed health plans.

More and more employers, consumers are hurt.
Unfortunately, the NWU is not the only small employer to be hurt by a MEWA health plan. In 1974, the Employee Retirement Income Security Act (ERISA) created a significant loophole for MEWAs - exempting them from state consumer protection laws and putting them under the Department of Labor's authority. The result was disastrous: The Labor Department was ill equipped to oversee the plans, the healthcare safeguards were weak and exposed thousands of consumers to healthcare fraud and mismanagement, and consumers faced millions of dollars in unpaid claims.

Based on stinging congressional testimony that showcased the shortcomings of federal management of these plans, Congress eventually enacted legislation to return authority over MEWAs to the states.

Happy ending for MEWAs? New legislation threatens healthcare consumers.
Despite the lessons of MEWAs, some elected officials in Washington, DC are again pushing legislation that will allow certain health insurers - known as Association Health Plans - to take away the few healthcare protections you now have under state law. You will lose your right to appeal if your AHP insurance company denies your claim. You will lose basic limits on how much and how often premiums can be increased. And, under the new federal law, these AHP insurance companies will not be required to have cash on hand to pay your claims. All of these are state laws that do not exist at the federal level. The new law will transfer oversight of your AHP insurer to the ill equipped U.S. Department of Labor - the same circumstances that led to the widespread victimization of healthcare consumers throughout the 1980s and 1990s. And, the proliferation of these plans will increase premiums for the rest of us, while failing to expand consumers' access to healthcare and leaving the sickest among us without coverage.

How to protect your family and business: Take Action Now.
Tell Congress healthcare without consumer protections is healthcare that hurts.