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March 14, 2005
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| High health insurance costs land at the front door of small business owners like Dan Conway. (MPR Photo/Mark Steil) |
Slayton, Minn. — The good old days of health insurance are not that long ago for Dan Conway. Conway employs two others in his small construction company. He does everything from remodeling projects to building new homes. Conway says he's always taken pride in helping pay his employees insurance costs.
"I can say when we first took it out, it seemed very affordable. But in seven and eight years it's more than doubled," says Conway.
At first Conway paid the entire bill. Then he asked his employees to cover a quarter of their insurance costs. Then half.
"And even at that it just seems to be an enormous bill every month," says Conway.
Conway pays a little over $2000 a month for health insurance; about half for his family, the rest for the employees. Conway's worry is shared by many companies. A Minnesota Chamber of Commerce survey last year found business' number one concern was health care. 16 percent said they were likely to stop providing employee coverage if costs keep rising. A couple years ago Dan Conway saw the answer to his problems. He was at a farm and home show in Slayton, where he lives.
"They had a nice booth and they had how it would be 15 or 20 percent cheaper than what we were paying now," says Conway. "I was excited about it."
'It' was Prairie Health Care. The idea was to get small business owners like Dan Conway into a health insurance buying pool. The idea is known as a health care purchasing alliance. The legislature passed enabling laws for the concept in the late 1990's. The state also helped Prairie Health and several other purchasing alliances around the state get started with grants. Dan Conway liked what he saw, and asked for a price quote.
"We got our quotes back and believe it or not we were really shocked," says Conway. "Because the quotes were higher than what we're paying now."
Prairie Health's inability to beat the competition in price also disappoints Gary Sorenson. The Cottonwood County commissioner and Prairie Health board chair says the purchasing alliance has signed only four businesses, roughly forty people, in almost two years.
"We're not ready to throw in the towel," Sorenson says. "I think it's important to have something out there as an alternative."
With only a handful of customers, Prairie Health is unable to negotiate lower insurance rates for its customers. Sorenson says the group will reconfigure it's policies, it may offer health savings accounts, to try to bring down cost and attract new business. It may be too late for that in northwest Minnesota. RuralCare Partners, has signed up about 150 people over two years. RuralCare board chair Brian Johnson says he hoped to have several thousand people enrolled by now. He says it's likely RuralCare will go out of business at the end of the year.
"We can't continue at this level of membership," says Johnson. "I think at the end of the day we'd like to see the purchasing alliance option not go away totally. But I'm not sure that's going to persist here in northwest Minnesota."
Johnson says it's difficult to start a new health plan. He says initial premium rates tend to be higher than expected because the customer pool is too small to absorb risk. Several other Minnesota groups are exploring health care purchasing alliances and may offer policies in the next year or so. Dan Conway of Slayton hopes someone finds success.
"I don't know really what the answer is, I just know they need to address this I hope real soon," says Conway. "I don't worry about social security right now, I worry about health care."
Conway says with prices continuing to rise he wonders how long he can pick up even half the cost of his employee's health coverage.
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