Wisconsin Farmers, Small Businesses Benefiting from New Health-Care Co-Ops

By Todd, Anne | Rural Cooperatives, May-June 2007 | Go to article overview

Wisconsin Farmers, Small Businesses Benefiting from New Health-Care Co-Ops


Todd, Anne, Rural Cooperatives


Wisconsin is the first state to use the power of cooperatives to bargain for adequate, cost-effective health insurance for agricultural producers and small businesses. The concept of using group purchasing power to bargain for lower health insurance rates is not new. However, prior to the enactment of Wisconsin's landmark Co-op Care legislation, only large organizations had the ability to conduct these negotiations. Co-op Care extends those market concepts to help smaller scale businesses, including farmers and the self-employed.

The Farmers' Health Cooperative is Wisconsin's first health purchasing co-op dedicated to farmers and agribusinesses. Its formation was made possible by the Co-op Care law. Like other co-ops, the Farmers' Health Cooperative will be owned and governed by its members, who will be directly involved in future financial and benefit-package decisions. The initial cooperative board includes six producers and three staff members of the Wisconsin Federation of Cooperatives (WFC), the statewide advocacy association for cooperative businesses.

Health co-op strikes chord with producers

After three years of extensive development work by WFC and a number of dairy, farm supply and farm credit co-ops, FHC health insurance plans became active on April 1. Within just two days, thousands of people had already requested information about the program, says project coordinator Katie Mnuk. "This shows a clear demand from farmers and agri-businesses for affordable health insurance coverage," says Mnuk.

The co-op's mission is to provide Wisconsin's 70,000 farmers--and the agri-businesses that directly serve them--with access to affordable, comprehensive health insurance. Farmers' Health Cooperative is designed to use its power as a cooperative entity to bargain for cost-effective coverage and increase health care options for its members.

About 35 town meetings were held across the state during the spring to discuss the plan with producers and rural small business owners. WFC President and CEO Bill Oemichen says attendance was well beyond expectations. In the Green Bay area alone, more than 600 producers attended meetings during a three-day period.

After only five weeks of marketing the co-op program, the number of producers and agricultural businesses that had already signed up and paid their first insurance premiums was rapidly nearing the number projected for the first year, Oemichen noted.

The co-op's marketing effort began Feb. 19 with a press conference at the Wisconsin state capitol led by U.S. Senator Herb Kohl, Governor Jim Doyle and Oemichen.

Aetna, one of the largest U.S. health care insurers, has been selected to provide the health insurance for the cooperative. Agri-Services Agency of New York (ASA) has been selected as the plan administrator. ASA is a subsidiary of Dairylea Cooperative. Now that the plans are active, individual members can begin reaping the benefits of that group purchasing power, backed by the expertise of a healthcare industry leader as their provider.

FHC offers members a choice from among six different enrollment plans, with deductibles ranging from $300 to $5,000. Mnuk says these plans offer more comprehensive benefits at lower prices than most could buy under an individual plan. FHC members may choose from traditionally structured, preferred provider organization plans, or take advantage of the tax benefits available through coverage under one of two high-deductible health savings account compatible plans.

The various insurance products have been tailored to meet the specific needs of the farming community, and include coverage for injuries that occur on the farm. Also included is coverage for $500 of preventive care per member per year, maternity care and prescription drug coverage.

One of the co-op's goals is to provide more predictable, stable rates for its members. To be eligible to join the co-op, applicants must be between the ages of 18 and 64, live or work in Wisconsin, and derive at least 66 percent of their income from farming. …

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