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Health insurance is a luxury for many
by Bob Reha, Minnesota Public Radio
January 27, 2003

Adam and Kelly Splomskowski, and their children -- Gabbi, 2, Connor, 4, and Alex, 5. (MPR Photo/Bob Reha)

Good health is important to everyone. Especially if you're struggling to make ends meet and have no health insurance. Health plan officials are predicting double-digit increases in health care premiums in Minnesota. It's a situation that has some people looking for new ways to address insurance costs.

Frazee, Minn. — Adam and Kelly Splomskowski of Frazee, Minnesota, are like a lot of couples. They both work to support themselves and their three young children. Kelly works part-time as a waitress. Adam works for Barrel of Fun, a snack foods company. Together they make about $25,000 a year, but they have no health insurance.

Adam says it's a constant worry for the family, especially if something would happen to their children. He says with their limited income, it's a gamble they have to take.

"(I) pray to God there isn't a major expense. To pay for their normal shots and checkups you're only talking $800 or a $1,000 a year, (at the most) maybe $2,000 or $3,000," says Splomskowski. "(That's) versus $5,000 before you get any real coverage through a lot of insurance companies."

Splomskowski says he and his wife can get health insurance through their jobs. But they couldn't afford the premiums, so they dropped the coverage.

"Her insurance premiums were over $300 a month. We were actually going in every two weeks and paying them for her insurance instead of her getting a paycheck," says Adam Splomskowski. "The difference was anywhere from $5 to $10 every two weeks, up to $70 to $80."

Splomskowski says that might not seem like much money to some people. But for a family of five, every dollar counts. The Splomskowskis don't qualify for free medical assistance programs. They make too much money. Getting into state programs like MinnesotaCare has been frustrating.

"(You) have to go through all the headache, hassle and paperwork," says Splomskowski. "And you're dropped because you made $1,200 more than your family's supposed to make for your income for that year, so you can't be covered by programs through the government."

	Small business owners are squeezed, too

Minnesota's Commissioner of Human Services, Kevin Goodno, says he understands people's frustration with the system. But he says income guidelines are necessary.

"The alternative is not having the program," says Goodno. "And so people have to understand that regardless of how you set the program up, unless you just say take the income caps off completely, there's always going to be somebody that bumps up against some limit."

Goodno says the key to affordable health insurance is to bring the cost down. Health plan officials predict double-digit increases in health care premiums this year. In Minnesota, average premiums could increase from about 12 percent to more than 20 percent. Officials say that increase comes from expensive new drugs, new procedures and therapies. Health care costs are also controlled by lower reimbursement rates for Medicare and Medicaid.

Brian Johnson is manager of Johnson Oil Company of Hallock, in northwest Minnesota. It's a family business that employees 20 full-time workers. Johnson says it's getting harder to offer his workers health care insurance. Last year the premiums cost $140,000.

"We've been whittling back the coverage. The deductibles have been going up higher, co-pays have been going up higher, just to keep a package in place for employees and their family members," says Johnson. "And even with those cutbacks in coverage, premiums have got to the point where we've had to ask for increased contribution from our employees."

Johnson says he's considering an alternative that would allow him to get the same coverage he now offers and save 20 percent. He's considering signing up for that alternative, a new health care purchasing alliance.

Since 1997, state law has let people band together to buy health care insurance. Finally, this year people in seven northwest Minnesota counties are taking advantage of the new purchasing alliance. People who don't meet income guidelines for other programs qualify for inclusion.

Individual members pay a one-time fee of $50. Businesses with two to 10 employees pay a fee of $100. Businesses with more workers pay a fee of $200. Brian Johnson says the idea is to create a pool of money and develop a health care plan designed by members.

"You're a member of a purchasing alliance, you have a say, you have a vote," says Johnson. "If you don't like the benefits or have other problems with the product, you can be on the board or you can speak to a board member and affect change."

Johnson says the alliance has teamed with HealthPartners, a Bloomington, Minnesota-based health maintenance organization. He says alliance members are required to make a three-year commitment to the program.

"Without a commitment, you could jump in and get a bunch of your health problems fixed up and jump out, and that would be harmful to the plan," says Johnson.

But Johnson says the commitment to perform is not a one-way street. He says if the alliance is not successful in keeping costs down, members have options.

"If in any one year the premium jumps 25 percent or more, they can leave the purchasing alliance (with) no penalty," says Johnson. "Or if two years in a row the premium increases more than 15 percent, then too, they can leave the purchasing alliance (with) no penalty."

Some other health care alliance programs are experiencing problems. The Prairie Health Care Alliance is a nine- county program in southwestern Minnesota. Alliance members say their program is stalled because of competition between two Sioux Falls, South Dakota health care providers.

The alliance hired Sioux Valley Hospitals and Health System to run the program. Sioux Valley will also oversee the network of hospitals and clinics in the nine counties. Sioux Valley operates most of those facilities. But the hospitals in three other communities are operated by a competing company, Avera Health. It is not part of the alliance. The absence of Avera clinic doctors would make the health plan less attractive. In Worthington, for instance, Sioux Valley manages the city-owned hospital, but Avera has many of the town's doctors in its clinic. Many in the alliance believe Avera is staying out of the network because it wants to scuttle Sioux Valley's business opportunity with the alliance.

Kelly Splomskowski would like to know more about purchasing alliances. She's not asking for free health care, just affordable insurance.

"I'm not one of those people that brings my children to the doctor every second," says Splomskowski. "If they have an ear infection I'll bring them in, if they have chicken pox I'll bring them in, if they have a high fever I'll bring them in. But other than that I can handle it at home."

Adam Splomskowski says any program that would give his family access to affordable insurance is worth pursuing. He says it seems the only way to get good health care is to be dirt poor, or make $50,000 a year.

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