Paying a premium 

Can Montana gets its health insurance costs under control?

There’s nothing like the feeling of setting off into the woods and not seeing anyone for hours, or casting a line into a pre-dawn river in your own little peaceful world. For most Montanans, the fact that the state is big, sprawling and sparsely populated is one of the main reasons why they’re here. There is, however, one major drawback: the high cost of health insurance.

State Auditor John Morrison has heard his share of “heart-wrenching” stories about the worsening health care crisis in Montana. “I met one woman who owns a small family restaurant with her husband,” Morrison says. “When I asked her how they were dealing with the increasing costs of health care, she stood there, a big plate of food in each hand, her eyes filling up with tears.” The couple pays $900 per month for coverage for themselves and their children. When the bills pile up, they don’t know what should go first: the mortgage on their home, the restaurant, or their health coverage. “She said their premiums are just about breaking them.”

Another man Morrison met is in “crisis mode.” He is in his late 50s, several years shy of receiving Medicare, and although he is relatively healthy, he suffers from high blood pressure. He and his wife pay $2,200 a month for insurance coverage.

Ironically, these two families can count themselves as lucky. Unlike 18.5 percent of Montanans, they have some sort of health coverage, which means that if they get sick or have an accident, need a prescription or an operation, they will not have to pay the full cost out of pocket—or do nothing—because the money is not there.

To devise a plan to ameliorate Montana’s health care crisis, this week Morrison and a group of colleagues held roundtable discussion in communities throughout Montana, including Missoula, in search of possible solutions.

“Compared with other states, the percentage of uninsured in Montana is really high,” says Morrison. “Even our neighboring states are doing much better with only 8 to 15 percent uninsured. And nationwide, 14 percent of people have no health coverage. We should be able to cut that number in half with innovative, creative approaches. Historically, Montana hasn’t done that.”

But solutions, he says, will not be simple. “One reason we have higher insurance rates is because most businesses are small and have only a few employees,” Morrison says. “In Montana, 75 percent of companies have fewer than 10 employees, and rates don’t go down substantially unless a business has 50 or more employees.” In fact, 60 percent of small businesses can’t afford to provide their employees with health insurance at all.

“The number of insurance carriers in Montana is also limited. It’s all based on supply and demand,” says Renée DeFrance, student insurance representative for the University of Montana. She says the cost of both medical care and claims have gone up so much in the last few years that smaller companies just can’t compete. The University uses Blue Cross/Blue Shield, the largest insurance carrier in Montana, and according to DeFrance, the company that has “its foot in the door of the state.”

Until this year, the city of Hamilton paid 100 percent of the cost of health insurance for its employees and their families. Now, coverage is extended to employees only, not their dependents. “This is a big switch for us. We just couldn’t afford it anymore,” says Mark Shrives, Hamilton city administrator. “Every year we try to get more competitive bids, but we can’t seem to get anything better. The rates just keep going up.”

“Health insurance is not like car or homeowner’s insurance, where if you don’t pay, your car or your flood damage doesn’t get fixed,” says Morrison. “When ‘damages’ are presented at an emergency room, the person is treated and figuring out the payment comes later. Unfortunately, the cost of treatment for people who can’t pay or who don’t have insurance gets shifted to those in the private market. In essence, people who have health insurance are basically helping to pay for those who don’t.”

For example, at Marcus Daly Memorial Hospital in Hamilton, 60 percent of the patients are on Medicare, 8 percent are on Medicaid, and 3 to 4 percent are on worker’s compensation, according to hospital administrator John Bartos.

“We’re a small, rural community,” says Bartos. “We’re writing off more than we’re getting back, so the cost ends up being passed to third parties,” that is, those who do have health insurance.

The fact that Montana is spread out over a large area also poses problems. “Statewide, compared to many other states, we have more CAT scan and MRI machines and fewer people using them, which is costly,” says Morrison. Upkeep for a hospital can be exorbitant, especially for a small, rural hospital where the number of insured patients is frequently low.

Among the solutions Morrison is considering, some of which are based on strategies used in other states, are “purchase pools” (small companies pooling their employees to get the lower rates that larger companies enjoy); “premium sharing” (creating a sliding scale for health insurance for people in lower income brackets); and “refundable tax credits” (giving whole or partial tax credit based on health insurance premiums).

“The health care crisis in Montana does not have to be like Sisyphus,” Morrison says. “It would be exciting if the state government accepted some big, innovative choices instead of little, meaningless window dressings. Even bringing the percentage of uninsured from 18.5 percent to 12 percent would make a huge difference and it would mean millions of dollars not being shifted onto those who are already paying high premiums.” Morrison plans to have a package to present to the Legislature by June.

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