Iowa Public Television


Rural Health Care Cooperatives Get Another Look

posted on December 18, 2009

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The other issue occupying center stage for policymakers these days is Health Care.

The House managed to pass comprehensive health care reforms months ago, but a similar measure in the Senate has fallen prey to partisan politics. President Obama has repeatedly called on Senate lawmakers to approve the health care bill before the Christmas recess.

On Friday, Republicans threatened to delay Senate business with a health care read-a-thon over the weekend. Democrats, meanwhile, searched for the 60 votes necessary to override the filibuster and a local forecast of up to 20" of snow added to the list of potential problems.

An option considered at one point that seems to get little attention amidst the partisan rancor, would organize groups of people into health care cooperatives. A practical application of the concept can be found in Wisconsin where farmers and factory workers are capitalizing on their numbers. Art Hackett explains.

In the fall of 2007, the Farmer's Health Co-op was soliciting new members in town meetings such as this one in Reedsburg.

Among the coop's first members were Jim and Connie March who operate a dairy farm near Dodgeville. Connie March said the couple had health insurance but had been shopping around for a better deal.

Connie March, Dodgeville, Wisconsin: "Because it was getting so expensive and they weren't covering our children past the age of 19."

Two years later, the March's son Travis is still covered since he lives and works on the farm. Jim March says word has gotten around that the family is in the Co-op.

Jim March, Dodgeville, Wisconsin: "We've had several calls about knowing about the area. I'm sure there are others looking into it."

To join the Co-op, the March's had to make a three year commitment putting up a deposit they would lose if they dropped out early. With the end of that commitment approaching, Connie says she's planning on staying.

Connie March, Dodgeville, Wisconsin: "They do the preventatives...I had a physical this year and they paid everything but the deductibles... It's still cheaper than it was with the other insurance company. Two years ago? Than it was two years ago so that's a good thing."

Cathy Mahaffey is the Co-op's Executive Director.

Cathy Mahaffey, Farmer's Health Co-op: "We've done some surveys. We've found that 80 percent of our members either said premiums didn't increase or that they actually went down. But sixty five percent said their benefits improved."

The Co-op started out covering about 2,200 people. Since then, it's grown about 18 percent. Mahaffey says the economy has held back growth as has competition from Badger Care, a State of Wisconsin program for the uninsured.

The Co-op doesn't just cover individual farmers. It also covers companies like that support agriculture like Alpine Foods, a cranberry processors in Nekoosa. (graph)

The firm started five years ago, processing bulk cranberries for sale to bakeries.

The founder, Jonathan Smith, hoped to grow by developing new uses for the cranberry. Among them, hand lotion containing oil from cranberry seeds. As a start up company with only two employees, insurance was prohibitively expensive.

Jonathan Smith, Alpine Foods: "I was lucky enough to have a wife with a job that did provide it. When she quit working, it was just the family and I, we had to risk it until we could find group insurance."

Christine Sohns is Alpine's chief finance officer. Prior to the Co-op, she relied on COBRA benefits from her former employer.

Christine Sohns, Alpine Foods: "I knew it was going to be ending soon and it probably would have been a situation of whether I would be able to continue with Alpine food are go to another company where I had to get insurance."

Today, Alpine Foods uses the Co-op to offer insurance, albeit a plan with a high deductible, to their 25 employees. They're expanding and marketing a new product, Berry Bits. Smith says they don't have the cranberry's sour taste, or the calories from the sugar often used to mask it.

The company's big enough they might be eligible for conventional group coverage but Sohns says they still prefer the Co-op.

Christine Sohns, Alpine Foods: "We could get comparable insurance at the same price but with a lot less as far as benefits far as coverage. And that's what I was concerned about, getting good coverage for the employees."

The Co-op offers insurance to individuals and firms which might otherwise go uninsured. But its plans have seen rates increase since it began.

The Co-op's original enrollees were hit with a seven-point-nine percent rate hike in January 2008 and a nine-point-eight percent increase a year later.

In comparison, Wisconsin's Commissioner of Insurance reports the average health plan for a small business in central Wisconsin saw increases of seven percent, and two-point-four percent over the same years.

The catch is that most members would have to be covered by individual plans which are often more expensive and don't cover pre existing conditions.

Cathy Mahaffey, Farmer's Health Co-op: "What we're seeing is double digits for those individuals...we think we're doing better than what these folks could accomplish on their own."

In April of 2010, the Co-op will face its first real test. The original members will be able to drop out and collect the deposits they posted when they joined.

Cathy Mahaffey, Farmer's Health Co-op: "That was the payment that they made to secure their commitment for three years and we said if you stay, you'll get that money back. And they'll be receiving those checks in 2010. We believe that because of the premium increases, which have been in single digits, the benefits, the satisfaction surveys show very high satisfaction rates, we feel we'll keep a high percentage of those."

For Market to Market, I'm Art Hackett.


Tags: agriculture co-op farmers health care insurance news rural Wisconsin