Co-op plan needs federal cooperation
Wisconsin State Roundup
Published September 1, 2004 | September 2004 issue
Wisconsin is moving ahead on plans to create health-insurance purchasing cooperatives, but the project needs $2 million from the federal government.
Last December the state passed legislation authorizing five regional co-ops that will allow members to negotiate plans with insurers collectively and keep premiums down. The co-ops are intended for small businesses and especially farmers who face high insurance costs when they purchase individually. It is estimated that 25 percent of Wisconsin farmers have no insurance.
Insurance companies are worried about the extra risk associated with clients who have been uninsured for long periods, which they say will require higher premiums. The solution would be a stop-loss fund to underwrite the added risk. It would cover medical expenses from $30,000 to $100,000, allowing insurers to charge less.
When the original bill was passed, legislators left out the reserve fund over fears it would cause the bill to fail amid the state's budget crisis. Assembly members have proposed the funding for inclusion in the 2005 Agriculture Appropriations Bill.