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Insurance Pools Might Help V.I. Uninsured

May 16, 2005 – After two years of looking at options, researchers may be close to finding a way to expand health insurance coverage in the Virgin Islands. This news comes just two days after Gov. Charles W. Turnbull acknowledged the need to help the uninsured.
Jacqueline Hoop Sinicorpe, project manager for the V.I. State Planning Group Project, said recently a leading proposal for increasing coverage for some 26,000 uninsured Virgin Islanders is insurance pools. These pools would be similar to risk pools created for people who can't get automobile insurance for one reason or another. They are thrown into a pool and insurance companies are assigned to pick up the coverage, based upon the percentage of business they write in the territory. If a company writes 10 percent of business not in the pool they would theoretically be required to take on 10 percent of the pool. It's an idea targeting the private sector where small businesses are finding the cost of providing health insurance getting out of reach.
"The Bureau of Economic Research and the Office of the Governor received a grant several years ago to study the components of the health insurance market of the Virgin Islands. (See "V.I. Survey Data on Uninsured Being Analyzed"). One of the major findings of that study is that the majority of people who are uninsured — and the total uninsured is about 24.1 percent — work in the private sector," Sinicorpe said.
Of that sector, close to two-thirds work for small companies. The rest, she said are self-employed. Added to the population that earn low wages or are unemployed, they make up the group of people lacking health insurance in the Virgin Islands.
In the initial phases of the study, researchers polled individual households and later collected data from business owners to see who had health insurance. Using that information the state-planning group tried to structure some alternatives, which they shared with officials at the St. Thomas-St. John Chamber of Commerce and the St. Croix Chamber of Commerce earlier this year. Presentations were also made before officials of the territory's hospital board.
"There was a presentation at the territorial board meeting in January and at the district board meeting," said Amos Carty, chief operating officer at the Roy L. Schneider Hospital. "I think what we looked at is what the problem is. I think the next step now is how do we solve it."
The leading idea, according to Sinicorpe, was to address the problem by keeping the economy of scale in mind. "We could pool together unrelated businesses," she said. "Businesses in the Virgin Islands are predominantly small, say four people. The premiums that they are going to be quoted for those four are going to be different than if they, say, were a company of 500."
Since the presentation, project administrators say they have modified their approach but are still thinking along the lines of organizing unrelated small businesses into insurance pools, allowing them to cover their employees while taking advantage of lower insurance rates.
So far there has been no comment from members of either business group, other than from one on St. Croix who said he remembered attending the presentation. Another Chamber official said they would like to see more effort go into expanding health insurance and were disappointed that further progress had not been made by now.
When the health insurance study began around the start of 2003 researchers said they would produce a series of options to present to the governor. It would then be up to administration officials to choose the favored option and start seeking ways to implement it.
Now, Sinicorpe and Economic Research director Lauritz Mills say the final report, expected to be submitted by the end of 2005, will contain only one option.
"This is the option we are proposing," Mills said in a telephone interview given last week. Both she and Sinicorpe said Turnbull is aware of the changes to be expected in the final report, and is endorsing to the pool coverage plan.
However, one industry specialist, Carl Gotts, owner of Gotts and Associates Insurance, is less optimistic about the possibility of most health insurance carriers going along with the idea "It works in other states where there are millions of people. But insurance companies are in the business to make money," Gotts said. "Our numbers are not big enough to warrant that sort of program.
"We have 105,000 population. About 33,000 are covered under the government insurance policy including retirees, dependents, as well as workers."
Of the remaining groups who cannot afford coverage, or who aren't covered under private companies, many are high risk – the same as those who cannot get standard automobile insurance coverage, Gotts said.
But Sinicorpe told the Source she has been in conversation with a "major underwriter" about the possibility of forming a pool to address the uninsured problem. She wouldn't name the company, and wouldn't say if it was only one company, or if it was a company, or companies, already doing business in the territory.
However, she did say "legislation" would likely be required in order to implement the plan.
Later this year Sinicorpe said a report on the two-year effort should be presented to Turnbull. The recommendations are expected to come in the form of policy options, from which officials are expected to choose.
The dilemma of the uninsured was on the mind of the chief executive. In a statement issued from Government House last week Turnbull pointed out that more individuals, families and small companies are having a harder time finding affordable health coverage in the territory.
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