Health Insurance Some Is Better Than None
MUSKEGON— Like many small business owners, Anne Woodring had always wanted to offer her employees health insurance but just couldn’t afford it.
So a little more than a year ago she turned to a new initiative in Muskegon County that is making it easier for small business owners like herself to afford basic health coverage. With the ability to now offer health benefits, Woodring has seen employee absenteeism and turnover fall off sharply at her local franchise of Merry Maids, where she employs 10 people who clean homes.
“I don’t have to recruit employees on a consistent basis. This health plan’s attractive enough to keep them here so they’re not looking for another job that gives them this benefit,” said Woodring, who started the Muskegon Merry Maids franchise six years ago.
She is one of nearly 270 small businesses employing more than 600 people in Muskegon County that are enrolled in Access Health, a not-for-profit program launched in late 1999 to provide basic health coverage for the working uninsured. The price: $38 per month for individuals, plus the standard co-pays and deductibles. Employers pay the same $38 amount per employee.
“The bottom line is people that are buying our product want to do the right thing. They just can’t afford it,” said Vondie Moore Woodbury, project director for the Muskegon Community Health Project, the organization responsible for Access Health’s formation. “If people are willing to pay something and we can get them into care, then there’s a public benefit to that.”
A regional health care planning initiative recently launched a similar effort in the Grand Rapids area to provide coverage for the estimated 50,000 people in Kent County who are without health insurance.
The Alliance for Health estimates that a good number of the uninsured in Kent County are small business operators and their employees, and people who are self-employed. The goal is to formulate a program that would provide “bare bones” health coverage at an affordable price, Alliance President Lody Zwarensteyn said.
While the coverage would be far from optimum, it would at least help people who are now without insurance to see a doctor when they’re sick.
“Something is better than nothing,” Zwarensteyn said.
Working with a study group that consists of business leaders from throughout Kent County, including representatives from health care providers and insurance companies, Zwarensteyn hopes to develop a plan that would cover doctor visits and diagnostic procedures such as x-rays, offer a “very limited” prescription plan and have low co-pays. The targeted cost: $40 a month per person, for both the employer and employee.
A benefit of the initiative is the potential savings for the health care system down the road, Zwarensteyn said. People without health insurance are often reluctant to see a doctor when they have a problem. Making it financially easier for them reduces the chances a person’s condition will become chronic and more costly to treat in the long run.
The program could also help to reduce the shifting of costs for treating the uninsured onto the insured.
“Without coverage, most people just don’t seek care early. That’s just the way it goes,” Zwarensteyn said. “If we can find ways to get people into a form of care, so basic things can be treated early so it’s cost-effective, then there’s less of a chance for shifting those costs onto other payers.”
Funding for the Kent County program, as it does with Access Health in Muskegon, would come from three sources: Existing Medicaid dollars from the state and federal government, fees charged to subscribers and employers, and donations from public and private interests.
While much work remains, the study group hopes to have the program in place by this summer.
“We’re trying to figure out what kind of plan we’re really designing and what we can afford from a standpoint that’s practical and feasible,” said Carl Ver Beek, an attorney at the law firm Varnum, Riddering, Schmidt & Howlett. He serves on the Alliance study group as a representative of the Grand Rapids Area Chamber of Commerce’s Health Care Committee.
“We need a good plan at an affordable cost for the employee and employer,” Ver Beek said.
The initiative comes at a time when small businesses, after incurring double-digit premium increases in the last few years, are having an increasingly difficult time affording health insurance.
The cost of health insurance is a “huge problem” for small business, said Nancy McKeague, a senior vice president with the Michigan Chamber of Commerce. The result is that small business owners are having to decide whether to keep their employee health plans.
“It’s very, very difficult to keep these in place right now,” said McKeague, who welcomes programs such as Access Health, despite their limitations.
Among the limitations is the depth of coverage.
In Muskegon County, for instance, Access Health only pays for care provided by local physicians and hospitals with which the organization has negotiated participating agreements.
There are also concerns with using federal tax money to support health coverage.
Charles Owens, state director for the Michigan office of the National Federation of Independent Businesses, worries about what happens to such programs if Medicaid money ever dries up.
“That then leaves a lot of people high and dry,” Owens said.
From a broader perspective, programs that offer a minimum level of health coverage could potentially steer the focus away from addressing issues that are driving up health care costs, he said.
“It’s a noble effort, but it shouldn’t distract us from looking at the root of the broader problem,” Owens said.
Owens also worries that programs like Access Health, and similar initiatives in Wayne and Ingham counties, provide their users an unfair competitive advantage because their health coverage is partly paid by a federal subsidy. Businesses with private health plans may opt to drop their plans and sign up with a cheaper program like Access Health, resulting in more people receiving “bare bones” health coverage, Owens said.
Zwarensteyn said the Alliance’s goal is not to replace existing health plans but to develop coverage that serves as a “bridge” for small businesses until they’re able to afford something better.
“It’s not a panacea. If you’re an employer, you don’t want to be there the rest of your life,” he said.
There are also safeguards that can be put into place to prevent companies from taking advantage of such programs.
At Access Health, subscribing companies must have gone at least a year without offering health insurance in order to qualify for the program, Woodbury said. Administrators keep on the lookout for people who dump an existing health plan so they can get something cheaper with Access Health, she said.
“We’re not going to take them,” said Woodbury, who readily concedes that Access Health doesn’t have all the answers.
She does, however, hope to find them.
“It’s not perfect. We’re still working on it,” Woodbury said. “The bottom line is you can make these things happen if you’re open to change. The only words you need to know are ‘what will it take to make it work?’”
More information on Access Health in Muskegon County is available online at www.accesshealth.org.