While the insurance industry knows how to cover health catastrophes, financing day-to-day healthcare expenses is still a strain despite decades of managed care industry experience. As FierceHealthcare readers know, $7000 per year in health plan premiums is typical, and family bills topping $12,000 a year are not uncommon. In Ithaca, however, activists have come up with a plan that covers a fair number of predictable health expenses, assisting individuals for a rock-bottom $100 per year.
The Ithaca Health Alliance helps the uninsured and underinsured pay for a variety of common health expenses, including broken bones, emergency stitches, ED visits and tooth extractions. The group got its start in 1997, when community leaders came together to see if they could help the large number of uninsured in their small community. "We pulled together $100 bills like grains of sand," says Paul Glover, a community development consultant who managed the plan for a while. "We built our own life boat."
The group, which serves about 1000 members, is careful to note that it doesn't offer insurance, but rather "grants" for health services. Members get from $3,000 to $4,000 per year in reimbursement, depending on how long they've belonged to the plan. While the non-profit doesn't do actuarial projections, board members have learned from experience what they can and cannot cover, Glover says. Of course, that means sharp limits on what it can subsidize, but over time Glover expects the group to expand its resources substantially. "As this gets bigger, this pulls in lots and lots of capital," he says. "In the future I can see us building hospitals."
In an effort to keep its processes as transparent as possible, every grant paid is listed on the group's website--as well as every grant denial--by member number, claim type and amount. Glover notes that when a member's expense is approved, the group cuts a check the very next day and pays the provider. Despite the potential volume involved, however, the group only has one part-time employee.
Despite their insistence that they aren't in the insurance business, Ithaca Health Alliance has had their tussles with the New York State Department of Insurance, which seems to have decided that the group might be an unlicensed insurance company. But they fought back. Armed with endorsements from state and local legislators, the local chamber of commerce and local hospital Cayuga Medical Center, the group "reached an accommodation" with the Department of Insurance, Glover says. As part of the agreement, they now sell memberships only to New York residents, rather than nationwide.
Since the group's founding, Glover has moved to Philadelphia, where he's preparing to start a similar health co-op. Predictably, state insurance regulators have already "clamped down" on the plan, which he has dubbed "PhilaHealthia." But Glover has already gotten pro-bono legal assistance, and expects to work something out with these regulators as well.
As Glover sees it, making this scheme work in a major market like Philly, which has an estimated 135,000 uninsured residents, will be an acid test for the health co-op model. "Ithaca is a small city, but Philadelphia is 50 times bigger," Glover notes. "We have a chance to set an example." - Anne