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Chamber may set up health co-op Medford, Ashland, Grants Pass together could cut costs 10% By DAMIAN MANN Rising insurance costs have become a headache for employers, but the Chamber of Commerce of Medford/Jackson County might have the aspirin. By joining forces with chambers in Grants Pass and Ashland, the 1,200-member Medford chamber hopes to create a cooperative that could lower health costs for employers and their employees. "Health insurance is at a crisis level," said chamber director Brad Hicks. "Businesses are clamoring for a solution, but I don't want to give any false hope." Still at a preliminary phase, the chamber's proposal could offer rate reductions of about 10 percent to potentially as many as 40,000 employees at member businesses, Hicks said. "I certainly don't want to get people's hopes up just yet, but as an organization I feel strongly about doing our best for Southern Oregon business," he said. Many employers and employees are having a hard time keeping up with escalating insurance premiums, which are averaging more than $200 per person each month compared to around $100 five years ago. With the loss of insurance carriers - particularly health maintenance organizations - last year, this area could be ready for a grass-roots health organization. Sue Densmore, chairwoman of the chamber's medical options committee, said one of the plan's main benefits would be a reduction in costs estimated at about 10 percent. Densmore cautioned that the chamber will continue to evaluate the idea, but initial response from members has been favorable. Chambers in Ashland and Grants Pass also have expressed interest, she said. To make a cooperative work, Densmore said a minimum of 1,000 to 1,500 employees would need to sign up, but 5,000 or more would create a more viable association. If interest remains strong, Densmore said a committee could be formed to decide the merits of a cooperative. Finally, members would be surveyed to gauge support for the plan. Jeff Brown, spokesman for Regence BlueCross BlueShield, Oregon's largest insurance carrier, said similar chamber cooperatives in California have run into trouble because they tended to get an older membership, which drives up claims. "They didn't stand the test of time," he said. He said these type of groups are difficult to put together because too few people sign up or because membership varies wildly from year to year. But Brown said Regence works with more than 20 cooperatives ranging in size from 200 to 80,000 members. They still use Regence to handle claims but not for administrative functions, including marketing, premium collections and customer service. The groups are made up of a similar industries, such as forestry, light manufacturing or school employees. Regence used to accept small cooperatives, but Brown said the minimum number of members must now be at least 1,000. He said management of an association can be difficult as the industry projects prescription costs to rise 20 percent annually and medical care costs to jump 12-15 percent. Most of the problems that a cooperative can experience depend on the age of a community and who uses the service. "A lot of it is demographically driven," he said. Local insurance agents cite a number of reasons Jackson County has experienced problems with insurance. "It's frustrating to see what's happening in our community with insurance," said Rollin Hogge of Rogue Valley Insurance. "We are now just hanging on to any medical benefit we can find." Hogge cites the low amount of reimbursement from the government for Medicare claims as one main reason insurance carriers have pulled out of Jackson County. Other states, such as Florida, reimburse doctors at a much higher rate than Oregon, he said, forcing many doctors to accept less than the prevailing rate. He said this area also has a high number of referrals to specialists and high medication use, particularly for Prozac. "People from this area are not necessarily a sicker group," Hogge said. "Our population generally uses its plans more. A lot of patients will come in and tell the doctors what they want done." Hogge said this surge in use has resulted in increased insurance premiums and fewer carrier options. He said the average employer spends $200 or more a month for each employee. Sally Densmore, president of Densmore Insurance and Financial Services Inc., said HMOs in some ways contributed to high use among Jackson County residents. "The HMOs brought in co-pays and a feeling of entitlement," she said. "For $10 you get the best medical care and prescription." Now, she believes, residents are discovering just how much health care really costs. Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.