RURAL HEALTH INSURERS AN ENDANGERED SPECIES
Seattle Times, The (WA) (Published as THE SEATTLE TIMES) - April 25, 1999

Author/Byline: KIM BARKER, SEATTLE TIMES STAFF REPORTER
Edition: FINAL
Section: LOCAL NEWS
Page: B1
CLE ELUM - Sherry Trumbull can't afford to get sick.
It happened once, last year, when she was so laid up that she couldn't lift her arms. Then she turned yellow. She drove to the hospital,
where she learned she had hepatitis and racked up a $1,500 bill.
Trumbull, 52, thinks about buying health insurance and checks into it every so often, but she never signs up.
"I'm a one-person store in a town that is basically dead," says Trumbull, who runs Cle Elum Feed and Pet. "It's still $250 and up a month.
I don't have it. I flat don't have it."
Her only option for insurance - a bare-bones state plan - would cost $252 a month. For the people who are uninsured in Cle Elum and
Kittitas County, the choices are shrinking. In some cases, they are disappearing.
An individual who wants to buy a private health policy can't do it in Cle Elum or Kittitas County anymore. That person could still turn to the
state's unsubsidized Basic Health Plan, but its premiums have skyrocketed, too.
Kittitas County, east of King County, is just one of the counties hit hardest by the shrinking pool of health insurers.
In 15 of the state's 39 counties, there are no insurers selling individual policies - bought by people who aren't insured through their jobs or
the government. Most of those counties are rural and in Eastern Washington. Individuals who already have policies aren't affected by the
insurers' pullout.
Doctors in Cle Elum say more people are choosing not to get insurance and, therefore, are not seeing doctors when they should.
Dr. John Anderson, who's practiced in Cle Elum for 23 years, says patients ask whether they really need that high-cholesterol drug.
Others put off heart tests or cancer screenings.
"It's horrible," Anderson says. "It's keeping people from coming in for necessary care."
The two insurance agents who handle the bulk of health insurance here are turning down potential customers.
"It's very, very frustrating," says Virginia Gayken, an insurance agent in Ellensburg. "We get four to five calls a day from people asking for
individual medical coverage. It's too bad we have to tell them, `Sorry, we don't have anything for you.' "
This health-care insurance crisis, often described in imposing acronyms, is starting to boil over. On Monday, Gov. Gary Locke announced
his plan to revive Washington's dying market for individual insurance.
The market is small - only about 6 percent of people in the state have individual policies. About 78 percent get insurance through their
jobs or the government.
But Locke's fixes would change the way health insurance works for everyone in Washington.
Under the plan, people would have to wait up to nine months - instead of three - for insurers to pay for a pre-existing health problem. The
insurance commissioner could no longer deny rate increases. Instead, consumers would get refunds at the end of the year if a company's
spending estimates were off.
For the first time since 1993, insurance companies could deny coverage to individuals.
The plan would then revive the state's long-dormant, high-risk insurance pool, which would cover people denied by insurers. Every
insured person in the state would pay up to 10 cents extra a month to help cover the pool.
The plan also would require insurers to offer comprehensive plans for pregnancies and prescription drugs.
The Senate narrowly passed the proposal last night. But the plan - which lawmakers, insurers and the governor cobbled together during a
period of months - likely won't pass the House before the regular session ends today. If lawmakers are called into a special session, they

 could pass it then.
"There's a 99 percent chance of no," says Rep. Eileen Cody, a Seattle Democrat and co-chairwoman of the House Health Care
Committee. "If I was a betting woman, I wouldn't bet on it."
Reform package unraveled
So what happened?
The health-care reforms passed by the Legislature in 1993 were supposed to guarantee health insurance for everyone.
The reforms were a complicated balancing act, requiring people to have insurance, communities to have health ratings, and insurers to
accept everyone, regardless of health problems. Pre-existing conditions would be covered after three months, at most.
If the costs were spread to everyone, insurers could afford to cover even the sickest and the poorest.
But the package unraveled because it contradicted federal law and because insurers and business owners didn't like it.
In 1995, the Republican-controlled Legislature stripped the bulk of the reforms, leaving only the most popular in place: People could still
buy health insurance whenever they wanted, regardless of health problems, and pre-existing problems were paid for after three months.
It wasn't hard to see the problems with this setup.
If people aren't sick, they might not buy insurance because they know they can get it later. This drives up health-care costs, which, in turn,
drives up premiums.
"The whole principle of insurance is you buy it before you need it," says Sue Crystal, Locke's health-policy adviser. "You can't buy fire
insurance when your house is burning down."
In Washington, women buy insurance after they're pregnant. Men buy insurance after they feel a slight tug in their heart.
Throughout the years, insurers have lost millions of dollars on individual policies in Washington. Insurers have increased their premiums.
For instance, Premera Blue Cross has doubled its individual rates since 1995. Insurers also have cut benefits.
The alternative to private coverage - the state's unsubsidized Basic Health Plan, a government plan originally billed as affordable - is
having the same problems. It's now in a death spiral, state officials say. Premiums shot up by more than 60 percent this year.
Depending on age, the unsubsidized Basic Health Plan can now cost up to $425 a month.
Only about 7,500 people are now in the program statewide, half the number who were covered in November.
Options are shrinking
In 1993, before the reforms, 19 insurers sold individual policies in the state. Now, only two do.
Premera Blue Cross covers 60 percent of the individual market - and essentially the entire market east of the Cascades. The company
said it lost more than $70 million on individual policies since 1994. In November, the company announced it would no longer enroll new
individuals anywhere in the state.
Premera's move stranded Cle Elum, a town of 1,800 in the Cascade foothills 85 miles east of Seattle, where the major employer is the
government and most of the other work is blue collar. Most businesses are named for trees or mountains. The tallest point on the main
street is a flagpole.
A blue sign at the corner of Power and Pine streets points to the town's hospital. But that's really an exaggeration.
The Cle Elum Family Medicine Center and the emergency room next door look more like a one-story diner.
About 8,000 people are patients at the center, which draws people from as far away as Seattle. The three doctors - the only ones in
town - treat generations of families. And they make house calls.
Last November, about 500 people at the clinic used the Basic Health Plan. Now, only about 250 do. The clinic doesn't keep similar
numbers for the people with individual policies, but doctors and the clinic insurance supervisor suspect more people are going without
coverage.
Betty Martin, plagued by rheumatoid arthritis, knew she couldn't drop her insurance. Martin, 60, works as a real-estate agent sometimes.

 Her husband is a logger.
Then, last November, Martin got sticker shock. She and her husband had been paying $496 a month for the unsubsidized Basic Health
Plan. In January, they learned, the cost would double.
Martin, who considered socking away that $1,000 every month in the bank, got lucky. She and her husband could get insurance through
the state association for real-estate agents.
"We wouldn't be having insurance if it wasn't for this," Martin says. "It's sad. It really is. There are so many people who need it and don't
have it."
One of those people is her daughter, Shelly Martin, who lives in Cle Elum with her five children, no insurance and "female problems."
Problems aren't unique
It's simple to diagnose the problems with the state's system.
Finding a solution is tougher than finding a specialist without a referral.
Some people, even doctors, are suggesting a single-payer setup that would put the government in charge of all insurance - similar to
Canada's system.
Others say the laws requiring insurers to pay for certain problems need to be eliminated. Mandates often lead to higher premiums.
The governor wants to sew up the safety net for health insurance, says Crystal, Locke's health-policy adviser. But if his plan doesn't fly,
the people of Cle Elum, Kittitas County, and 14 other counties will remain without a choice for individual health insurance.
Nationwide, the problems are the same.
Health-care costs are skyrocketing. Doctors and hospitals complain insurers don't reimburse them fairly. Insurers chalk up hundreds of
millions of dollars in losses on individual plans.
Business owners grumble about paying more for insurance that covers less. Patients want insurance to pay for everything, including the
newest technology and experimental drugs. But they don't want to pay for it.
In the Cle Elum Family Medicine Center, insurance supervisor Carel Martin says patients often don't know what their insurance covers.
She deals with patients who have both Medicaid and Basic Health, and she fears double payments are made regularly. She complains
about paperwork, which breeds like bacteria.
She's done this job for more than 16 years, and she's very frustrated.
Insurance isn't getting any easier.
"I'm about ready to go start cleaning motel rooms or renting canoes," she says. "I'm sick of this."
Kim Barker's phone: 206-464-2255. E-mail: kbarker@seattletimes.com
Caption: PHOTO1) STEVE RINGMAN/ THE SEATTLE TIMES: DR. JOHN ANDERSON, ONE OF THREE DOCTORS IN CLE ELUM,
SAYS SOME OF HIS PATIENTS DECLINE CARE BECAUSE THEY LACK INSURANCE. HE'S PICTURED WITH 10-MONTH-OLD
HAILEY KRAHENBUHL, WHOM HE HAD CHECKED FOR AN EAR INFECTION.2) STEVE RINGMAN/ THE SEATTLE TIMES: BETTY
MARTIN, WHO LIVES NEAR CLE ELUM, LEARNED IN JANUARY THAT THE PREMIUM FOR HER UNSUBSIDIZED BASIC HEALTH
PLAN WAS GOING TO DOUBLE.
Dateline: CLE ELUM
Record: 2957042
Copyright: Copyright 1999 The Seattle Times