Future of health care: Comparison shopping

  • Article by: JACKIE CROSBY , Star Tribune
  • Updated: February 4, 2012 - 9:52 PM

Under the new health law, buying insurance on exchanges could be easier, simpler and more affordable.

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Jim Welna, who owns Welna Ace Hardware in the Seward neighborhood, hopes insurance exchanges help his workers get better coverage.

Photo: Jerry Holt, Star Tribune

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Jim Welna is still haunted by the employee who turned down his offer to help pay for health insurance. The worker was 30 and seemingly healthy. He preferred to use his spare dollars to help family in Cameroon and to pay for his college.

Then his stomach pains started. The man put off treatment and swore off coffee and Mountain Dew. The pain eventually sent him to the emergency room, where doctors discovered late-stage non-Hodgkin's lymphoma.

Within months, he was dead. "He got care, but he got it too late -- and it was very expensive," said Welna, who owns a hardware store on Franklin Avenue in Minneapolis with his wife, Sue. "It made me passionate about finding a better way. Health care should not be dependent on people having a job or having a job that has great insurance."

The new federal health law offers a possible solution for Welna and his workers. In 2014, insurance exchanges are set to be up and running, creating a one-stop, competitive marketplace online for as many as 1 million Minnesotans to comparison shop among multiple health plans.

The promises are many: Ensure basic levels of health coverage to more people. Put consumers in the driver's seat with more choices. Make the process as simple as comparing hotel prices and amenities. Use competition to keep costs low.

But many questions remain: Will the promise of making quality health care more affordable hold up? Can the exchanges attract young, healthy people? How many insurance plans will be part of the exchanges? Is the requirement that everyone get coverage allowed under the Constitution?

Joel Ario, a health care consultant in Washington, who spent a year leading the effort to develop the exchanges for the U.S. Department of Health and Human Services, said one thing is clear: The current system isn't working.

"Today, it's very difficult to shop for insurance, particularly on the individual market," Ario said. "If you're young and healthy, there are good deals. If you're not young and especially if you have a health condition, you're probably not going to get much help out of the individual market today."

The fate of the exchanges is wrapped up in a looming Supreme Court ruling, election-year politics and policy battles over how they will work.

But Gov. Mark Dayton is moving ahead on establishing a Minnesota model, even as legislators prepare dueling bills. Just last week, Dayton embraced the guiding principles recommended by his 15-member health insurance exchange advisory task force.

The state also has applied for a new federal grant to start building the high-tech backbone of an exchange.

In theory, the exchanges aim to help uninsured people like Jen Johnson, who has been living with lupus, an autoimmune disease, for nearly three decades.

Her employer offers health care, but the $300 monthly premiums are too steep for her budget. So the 40-year-old waitress is rolling the dice. She tries to eat well and goes to a MinuteClinic when necessary. For more serious flare-ups, she goes to the Neighborhood Involvement Program on Hennepin Avenue, where a volunteer staff provides medical care on a sliding-scale fee.

"It's not ideal," she said. "It's not like going to your own physician, where they know you and have your records."

Johnson said she's "enthusiastic, yet apprehensive" about the exchanges, particularly because insurers no longer will be allowed to deny coverage over pre-existing conditions.

"Insurance shouldn't have to fall on the shoulders of a small family business," she said. "Something has to change."

Insurance mandate

Starting in 2014, large businesses will be required to offer affordable and sufficient health care coverage, or else pay a penalty to fund coverage through the exchanges.

Individuals who don't get insurance through their jobs will be required to buy at least a basic level of insurance on the exchange. Part of the idea is that having healthy people in the exchanges would keep premiums low.

Low-income Minnesotans would get subsidies to help buy insurance, while individuals and businesses with fewer than 50 employees would get tax credits.

"I would love it if it worked, but I'm not optimistic," said Elizabeth Frost, a family practice doctor at Hennepin County's East Lake Clinic in Minneapolis.

Frost sees many low-income patients and undocumented workers. She supports a single-payer system or at least tighter regulation of insurance companies.

"My frustration is how complicated it is. If it was complicated, and it would help patients and help me, that would be one thing," she said. "People going online and shopping for different health plans doesn't work for me. Everyone deserves the same benefits."

Advocates of the exchanges say they will free small business owners from the challenges of dealing with complex health care benefits, so they can focus on running their companies. And by uncoupling health coverage from the workplace, people who move in and out of jobs and public programs will supposedly have continuous coverage through the transitions.

No job, no coverage

For Linda Lewis, that could be key. She had a full-time job with health benefits through Restore Medical, a Roseville-based medical device company. She lost her job in 2008, when Medtronic bought the company. Lewis eventually landed a part-time job, but got laid off again.

That's when she was diagnosed with diabetes.

At 62, Lewis now finds herself without insurance or a steady paycheck. She's too young to get health coverage through Medicare, and isn't poor enough to qualify for Medicaid. She refinanced the house she's lived in for 30 years to pull out some cash, and reluctantly started collecting early on Social Security. It's a struggle to cover bills on $800 a month, she said.

"I felt so lousy for a year," said Lewis, of Minneapolis. "Now, I'm just getting back on my feet, feeling like I can work again. But even looking at part-time jobs, you can't afford to buy insurance."

Battles over the financing, including subsidies and tax breaks, and other details will unfold in the coming months. Minnesota's nonprofit plans stand to gain thousands of new members through the exchanges, but argue they can't keep premiums low unless the exchanges include healthy people who don't use a lot of health care. Brokers who now earn commissions from insurance plans fear they'll be cut out of the spoils if consumers go directly to the exchanges.

Welna, the small-business owner, said he doesn't know a lot about the exchanges, but hopes they deliver on the promise of giving his 12 part-time workers better coverage.

"I really feel strongly that we, as a society, need to come up with a better way to care for people," he said. "It probably involves employers and employees paying a certain portion. Maybe these exchanges are a start, but it's by no means a solution."

Jackie Crosby • 612-673-7335

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