Patty Loew:
Two years ago, "In Wisconsin" featured a new approach to health insurance for farmers. This week we're still on the story with an update on the farmers health cooperative of Wisconsin. Co-op care, as it’s known, just moved out of its critical pilot phase. "In Wisconsin" reporter Art Hackett shows you how well it's working in Dodgeville and across the state.

Woman:
It's been really great to have this legislation.

Art Hackett:
In the fall of 2007 the farmers health co-op was soliciting new members in town meetings. Among the co-op's first members were Jim and Connie March who operate a dairy farm near Dodgeville. She said they had health insurance but were shopping around for a better deal.

Connie March:
It was getting so expensive and it wasn't covering our children after the age of 19.

Art Hackett:
Two years later the Marches’ son Travis is still covered since he lives and works on the farm. Jim March says word has gotten around that the family is in the co-op.

Jim March:
We've had several calls on knowing about it in the area, yeah. I'm sure there are more looking into it.

Art Hackett:
The Marches’ reaction, so far so good.

Connie March:
They do the preventive care so I had a physical and everything this year and they paid everything but the deductible. It is still cheaper than what it was with the other insurance company.

Art Hackett:
Two years ago.

Connie March:
It is still cheaper. And that's a good thing.

Art Hackett:
Cathy Mahaffey is the co-op's executive director.

Cathy Mahaffey:
We found over 80% of our folks either said their premiums didn't change when they joined or they were -- actually went down when they joined farmers health co-op. 65% said the benefits improved.

Art Hackett:
It started out covering 2,200 people. Since then it's grown about 18%. Mahaffey says the economy has held back growth as has competition from Badger Care, a state of Wisconsin program for the uninsured. The co-op doesn't just insure farmers. It also insures people who process agricultural crops like these cranberries that will float to the top of a bog in the fall. Alpine Foods in Nekoosa is one of those processors. They started five years ago processing bulk cranberries for sale to bakeries. The founder, Jonathan Smith, hoped to grow by developing new uses for the cranberry, among them hand lotion containing oil from cranberry seeds. As a startup company with two employees, insurance was prohibitively expensive.

Jonathan Smith:
I was lucky enough to have a wife that was working full-time and a company that offered it. Whenever she quit working and it was just the family and I, we had to risk it for a period of time before we were able to find a group insurance.

Art Hackett:
Christine Sohns is Alpine Food’s chief financial officer. Before joining the co-op, she relied on cobra benefits from her former employer.

Christine Sohns:
I knew it would be ending soon and it would have been an issue of whether I could have stayed employed with Alpine Foods or move on to another company where I had to get insurance.

Art Hackett:
Today Alpine Foods uses the co-op to offer insurance, albeit a plan with a high deductible to their 25 employees. They're expanding and marketing a new product. Berry bits. Smith says they don't have the cranberries’ sour taste or the calories from the sugar often used to mask it. They might be eligible for conventional group coverage but Sohns says they still prefer the co-op.

Christine Sohns:
We could get comparable insurance for the same price, but it really was a lot less as far as what the benefits were and less coverage. I was concerned about getting good coverage for the employees.

Art Hackett:
A research economist at the University of Wisconsin-Madison who is evaluating the insurance co-op says the coverage is better than that available through individual policies.

Reka Sundaram-Stukel:
It is the first time farmers have received preventive care, for one. They have never had the luxury of having an opportunity to go in for regular visits.

Art Hackett:
While the co-op's rates have increased in each of the first two years, she says that comes with learning the risk profile of its membership.

Reka Sundaram-Stukel:
When it first started, it had no history of utilization patterns. There was nobody collecting. So given, when you base your baseline prices, all you can do is to take -- intake as you look at people and say okay, fine, this is given your age and history, here is what we can offer you as insurance.     

Art Hackett:
She has found it difficult to determine a precise cost comparison because insurance companies quote prices on individual policies on an individual basis as opposed to the broad rating categories used with the co-op's group plans. So far she's impressed with the co-op's overall performance.

Reka Sundaram-Stukel:
They’ve been very engaged from an insurer perspective and consumer perspective. Actively making sure they do not get the worst deal on bids for insurance and negotiating good discounts from providers.

Art Hackett:
In April of 2010 the co-op will face its first real test. The original members will be able to drop out and collect the deposits they posted when they joined.

Cathy Mahaffey:
That was the payment that they made to secure their commitment for three years and we said if you stay you'll get that money back. They'll be receiving those checks in 2010. Again, we believe because of the premium increases, single digits, the benefits, we've done satisfaction surveys, very high satisfaction rate in our program so we feel very strongly that we'll keep a very high percentage of those.

Patty Loew:
The farmers health cooperative of Wisconsin has advanced out of the state's federation of cooperatives and is now a stand-alone organization. It came into being after the state legislature passed a law making the insurance cooperatives possible. The report you just watched was part of a collaborative healthcare reporting project by Madison area media outlets. To get more information on all the reports, just go to our website, wpt.org, click on “In Wisconsin” for a link.