Dairy Directors’

Leadership ConferenceApril 4, 2012

Presented by: Cathy Mahaffey, Executive Director

FHCW Background

• Farmers’ Health Cooperative of WI: Formed under 2003 WI Act 101 Co-op Care Dedicated to serving farmers and

agribusinesses with quality coverage A group purchasing cooperative

Medical, dental, life, disability, Agriplan

Member-owned and member-governed 6-member Board of Directors

FHCW Background

• Farmers’ Health Cooperative of WI: Launched April 1, 2007

Offers coverage throughout the state of Wisconsin

Partnered with Agri-Services, Syracuse, NY to find insurance carrier and to provide additional services to members

FHCW Background

• Funding: $450,000: University of Wisconsin School of

Medicine and Public Health’s Wisconsin Partnership for a Healthier Future Fund

$79,000: Wisconsin Department of Agriculture, Trade and Consumer Protection,

$10,000: AgStar Fund for Rural America Foundation

FHCW Background

• Funding: USDA Federal Appropriation

$4.45 million

Both Wisconsin and Minnesota

A portion used for start-up expenses

Remaining $4 million for “stop loss”

Very small amount of stop-loss funds used to date

Who is eligible?

• To be eligible for FHCW, you must:

Be 18 through 64 years old, and

Live or work in Wisconsin, and

Actively work in production agriculture so that at least 66 percent of income is derived from farming. (WI tax schedules F or C)

An agribusiness must be a business enterprise providing direct services to production agriculture and directly related to the production of food, feed or fiber

Dependents are covered until age 27 (26 starting 1-1-13)

Partners

• Agri-Services Agency A subsidiary of Dairylea Cooperative 30-years in business working with farmers and

agri-businesses Administers insurance for nearly 70,000 people

in 48 states Provides the following services to FHCW:

Enrollment Underwriting Customer Service Premium billing and collection

Partners

• Aetna was FHCW’s first insurance carrier (2007-2009)

• Anthem was chosen effective January 1, 2010Anthem provides the following services:

Claims adjudication Provider network contracting Wellness promotion, disease management

Health Risk Assessments

• 839 adult members (husband, wife) received a free Health Risk Assessment (HRA)

• FHCW contracted with Rural Health Initiative of Shawano County (RHI)

• FHCW worked with UW-Madison to develop an HRA questionnaire specific to farmers

• $200,000 of USDA money funded HRAs • “The HRA encouraged him to lose weight, he lost 40 pounds.”• “The HRA was a wake-up call.”• “I took the HRA very seriously. I came home and made huge diet

changes and started exercising. I can’t believe how much I lowered my numbers.”

FHCW Basics

• Member dues $6 per member per month for members who

enrolled April – December 2007 $12 per member per month members who enroll

January 2008 and after Dues are built into monthly premium

FHCW Basics

• Capitalization payment:

Required by law Capitalization payment equals the first month’s

premium plus 10% Agribusiness may sign a promissory note and

agree to pay the fee if they do not complete three years of enrollment

Individual farmers can pay one lump sum or be billed monthly

Returned after enrolled for 3 years – FHCW has been returning checks since 2010; after initial 3-year term, no new requirement

Key Plan Features

• Features include: Coverage for work-related injuries Preventive care coverage Prescription drug coverage All state mandated benefits included

Maternity Chiropractic coverage Mental health and alcohol/drug abuse

Seven different health plans offered; two are Health Savings Account compatible

Key Plan Features

• Features include: Guarantee issue: no one is rejected for

coverage Specific medical conditions are not

“ridered” Everyone renews January 1st; no

changes in premium for age bands until January 1st

Current Snapshot

• 1750 insured lives

• Enrollment in 62 of 72 counties in Wisconsin– Manitowoc County: 41 enrollees

– Brown County: 39 enrollees

– Dodge County: 38 enrollees

– Waupaca County: 33 enrollees

– Fond du Lac County: 27 enrollees

– Sheboygan County:25 enrollees

– Outagamie & Grant County: 24 enrollees

– Dane County 21 enrollees

Current Snapshot

• Average age: 46

• Male policyholders: 71%• Female policyholders: 29%

• Single policyholders: 47.9%• 2-person policyholders: 20.4%• Family policyholders: 31.70%

Current Snapshot

Group Size

• Sole Proprietors: 88.1%

• Groups 2-4 employees: 10.1%

• Groups 5-9 employees: 1.4%

• Groups 10-14 employees: .2%

• Groups 15+ employees: .2%

Current Snapshot

Product Breakdown

$300 deductible 11.6%$500 deductible 9.5%$1000 deductible 7.3%$2500 deductible 16.1%$2500 deductible - HSA 18.7%$5000 deductible – HSA 36.0%Essential .8%

Utilization

Medical Utilization 2010 2011 Anthem

Bench mark

Difference

Annual admissions/1,000 members 43 44.6 49 -9.1%

Annual days/1,000 members 167.1 169.2 192.3 -12.0%

Average length of stay 3.9 3.8 3.9 -3.2%

Annual outpatient visits/1,000 mem. 837 1,062.5 1,200.8 -13.0%

Annual ER visits/1,000 members 98.7 109.6 150.9 -27.4%

Annual office visits 1,994.3 2,206.1 2,828.1 -22.0%

Annual service lines 9,720.6 11,169 13,990 -20.2%

Office visits PMPY 2.0 2.2 2.8 -22.0%

Service Lines PMPY 9.7 11.2 14.0 -20.2%

Paid amount $4,549,430 $4,549,430 -

Paid amount PEPM $388.20 $472.11 $585.51 -19.4%

Paid amount PMPM $171.72 $205.52 $250.19 -17.9%

Premium RatesAverage Rate Increase History*

January 1, 2008 7.9%

January 1, 2009 9.8%

January 1, 2010** 9.5%

January 1, 2011 8.0%

January 1, 2012 5.35%

*excludes age bracket increase**change to Anthem

2012 Member Survey

• 750 members surveyed

• 20% response rate

• Satisfaction with:– Service– Provider network– Claim’s payment– Benefits

• Dissatisfaction with:– Cost

2012 Member Survey

Comments: “Overall, the health plan offered by FHCW is an improvement over the health plan I was previously

enrolled in.”• “We have had other insurances that didn’t cover as much as

this one does.”• “My previous plan had a lower premium, but if it wasn’t for

FHCW, we wouldn’t have insurance.”• “I did not have any health insurance before.”• “FHCW costs much more but I like the accident rider for my

kids and I.”• “Our premiums went up so not an improvement.”• “It’s the same.”• “This is better than old plan but still expensive.”• “Nothing can compare – cost not that different – but group

rates, negotiated fees for service, more services covered – I believe this plan saved our farm.”

Marketing

• FHCW relies on the following marketing activities: Year round radio commercial Mailers Print advertising Word of mouth Tradeshows Cooperative mailings/endorsements

FHCW Future

• 2014 Health care reform Only way to obtain premium subsidy is to

purchase insurance is on the exchange FHCW cannot be on the state exchange Cooperative Network and Agri-Services

Agency working together to find solutions

Questions?www.farmershealthcooperative.com

Cathy Mahaffey

Executive Director

608-848-7212

executivedirector@farmershealthcooperative.com