Lindy Wallace, president of the board overseeing the Colorado Health Insurance Cooperative, Inc., with her horse Joe. Credit: JW Stephens/Colorado Public News

Farmer’s union looks to draw down costs via health insurance co-op

By Michael de Yoanna
Colorado Public News

The Rocky Mountain Farmers Union says the costs of health insurance have become so high that many people who work in Colorado’s rural areas carry policies that only cover them in case of a dire emergency. So the union is seeking to do for healthcare what it has done successfully for milk, livestock and equipment: Form a co-op.

The idea, officials say, has the potential make care more affordable for the one-third of Colorado’s estimated 5 million residents who either have no health insurance or are considered underinsured. While the focus would be on rural residents, all Coloradans would be eligible to join.

“It’s not universal health care,” said Lindy Wallace, president of the board overseeing the Colorado Health Insurance Cooperative, Inc. “It is, though, an opportunity for people to have a voice in how they get their health care and how much their health care costs – and in taking more responsibility for their own care and learning about that.”

The farmers union, with a membership of 22,000 families in three states, recently submitted an application to create the nonprofit co-op in Colorado under the federal Patient Protection and Affordable Care Act. The co-op would be unique in that it would eliminate profit motivations by placing consumers in majority control of its board of directors. Patients who use the plan would have more direct say in which benefits are offered and how to compensate administrators.

Instead of lining the wallets of CEOs, profits could be used to “reduce premiums or improve benefits or improve the quality of care,” Wallace said.

If approved, details of the cost and specific benefits would be unveiled in late 2013. The insurance co-op would go on the market in 2014.

Dr. Michael Pramenko, a Grand Junction doctor who served on the federal board creating such Consumer Operated and Oriented Plans – or CO-OPs – described them as “a pathway for greater cost control.” Boards would be motivated, he said, to provide efficient and affordable plans, since they are directly accountable to members.

For-profit insurers can’t generate the “same level of trust” as a co-op, Pramenko said, because they don’t have such built-in accountability.

The farmers union is seeking up to $70 million in low-interest loans, including start-up money and funds that back the insurance it will provide. Roughly 175,000 more Coloradans could be insured through the co-op in the decade or so to come, Wallace said.

The prospective co-op is currently seeking doctors around the state to commit to accepting patients on the plan. However, it is unclear whether the federal government will approve the application. Each state is eligible to have at least one co-op; a spokeswoman with the Department of Health and Human Services declined to say whether the federal government has received any co-op applications from Colorado.

If approved, Wallace said the co-op’s “intent is to make (prices) very competitive.” The price could hinge on myriad of options – including the level of dental care or whether discounts at health clubs are offered. The monthly premiums, she said, could range from $300 to $500 – an amount she concedes could “probably” surprise consumers unfamiliar with the high costs of health care.

As detailed in a recent Colorado Public News report, a survey conducted by The Colorado Trust found that about 35 percent of Coloradans said they could afford no more than $50 a month for insurance. Ten percent indicated they could afford just $25 or less. But insurance currently averages $182 a month per person in Colorado, and can easily top $700-$1,000 for people older than 55 or with health problems.

Wallace says under the co-op, people with lower incomes may qualify to pay on a sliding scale under the Affordable Care Act. “So their out-of-pocket might be in the $50 range (a month) with a subsidy from the federal government,” she said.

Dede de Percin, executive director of the Colorado Consumer Health Initiative, said insurance co-ops could be a factor in keeping healthcare costs from rising as rapidly as the current trend.

“The increased competition among insurers in that marketplace is also going to help contain costs,” de Percin said. “Whether they’ll actually go down, I can’t really say.”

Wallace identified another hurdle for the co-op: The Supreme Court, which could strike down all or part of the Affordable Care Act. If the court removes the individual mandate requiring all Americans to purchase insurance or face fines, co-ops may be untenable.

Without the mandate, the anticipated rush of uninsured and underinsured individuals seeking coverage by the 2014 deadline probably wouldn’t happen. That would make it harder for a co-op – or any insurer – to offer more affordable plans to consumers, Wallace said.

 

Comments are closed.

News

Getty Images
August 27, 2016 | NPR · As players rose to stand for the national anthem at the 49ers-Packers game on Friday night, quarterback Colin Kaepernick pointedly remained seated.
 

AP
August 27, 2016 | NPR · Nuns Paula Merrill and Margaret Held, both 68, worked as nurse practitioners providing medical care at a clinic in Holmes County, one of the poorest in the country. They were found dead on Thursday.
 

NPR
August 27, 2016 | NPR · After the famous toucan received a prosthetic replacement, it’s story has helped spark a national movement against harming animals in Costa Rica, where a new anti-abuse bill is also gaining traction.
 

Arts & Life

Mark Seliger
August 27, 2016 | NPR · In Tom Wolfe’s first book of nonfiction in 16 years, he argues that the development of speech, not evolution, has made humans what we are today — evolution, he says, applies only to animals.
 

Shigeo Anzai Courtesy of Benesse Art Site Naoshima
August 27, 2016 | NPR · The population of Naoshima has fallen to 3,000. But this year, its art will attract 800,000 tourists from around the world. “The level of our sophistication has gone up considerably,” says a resident.
 

AFP/Getty Images
August 27, 2016 | NPR · Correspondents, editors and producers from our newsroom share the pieces that have kept them reading, using the #NPRreads hashtag. Each weekend, we highlight some of the best stories.
 

Music

Courtesy of the artist
August 27, 2016 | NPR · Sir the Baptist grew up on the South Side of Chicago. NPR’s Scott Simon talks with the singer and rapper about how music became his way of picking up where his father left off.
 

Susan Sharon
August 27, 2016 | MPBN · The religious sect known as Shakers, responsible for the song “Simple Gifts” and thousands of others, is almost gone — and a non-Shaker is trying to keep the group’s musical history alive.
 

Sony Pictures Classics
August 26, 2016 | WBGO+JAZZ.org · Hear three interpretations of the musical icon: on screen, with actor and director Don Cheadle; on the page, with co-biographer Quincy Troupe; and on stage, with trumpeter Keyon Harrold.
 

Get the KRCC iPhone App

The Writer's Almanac

Radiolab