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One for the Little Guys
In the Affordable Care Act era of health insurance coverage, one David goes up against an army of Goliaths.

Illustration by Elizabeth Baddeley

Malcolm Gladwell’s new book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, has surprised many with its explanations of why lopsided conflicts can often result in victory for the “little guy.” Gladwell’s conclusions are nothing new for Bob De Vita.

“I’ve been an underdog in a lot of situations,” says De Vita, chief executive officer of the new Common Ground Healthcare Cooperative, who has 40 years of experience in the health care field. “Underdogs learn how to win.”

De Vita’s cooperative is one of 24 nonprofit companies nationwide that received federal funding – a repayable loan, not a grant – to sell health insurance to individuals, small businesses and nonprofits for policies that took effect Jan. 1, 2014. It’s one of the Davids in the battle of the health insurance marketplace.

And De Vita and his colleagues – 17 paid staff and scores of volunteers – are taking that wisdom to heart as they deliver informational fliers door to door and at church and community meetings throughout eastern Wisconsin. The cooperative serves 19 counties, including Milwaukee. So far, it’s established partnerships with Aurora Health Care and Trilogy Health Network.

The need for an affordable alternative for small businesses and individuals has been obvious to many for years because, observers say, southeastern Wisconsin is dominated by United Healthcare, Humana and Anthem Blue Cross and Blue Shield – the metaphorical Goliaths.

“As a small-business owner, I’ve been buying health insurance in this marketplace for 30 years, and my rates would often go up 30 to 40 percent a year,” says Bob Connolly, co-owner of the James Company, professional fundraisers. Connolly is also the Common Ground chairman of the board. “Because I didn’t have any choices, I got clobbered on rates.”

Initially the Cooperative wasn’t necessarily aiming for the lowest rates – the goal was to offer high-quality policies without the annual double-digit increases. But De Vita says he was pleasantly surprised when the Wisconsin insurance commissioner’s office published the statewide rates after the Oct. 1 launch of the Affordable Care Act, and the cooperative learned its rates were no higher than those of its competitors.

Affordability is just one reason why Rob Guilbert signed up. “I like that they don’t have a big CEO salary or ad budget,” says Guilbert, a self-employed communications consultant, “and I’m impressed with their expertise. They have strong bench strength.”

Looking ahead, Common Ground aims to enroll 10,000 members by the end of its first year; the “sweet spot” of profitability would come at 20,000 to 30,000 members, which it hopes to achieve in three years.

The month of October was slow for Common Ground’s enrollment (only 142 members signed up). De Vita says the flawed healthcare.gov website was a large part of that. Now that healthcare.gov is up and running, membership is growing – up to 878 through November 2013.

Members can buy insurance directly from the cooperative or, if they require a subsidy, through a health insurance exchange. They can also buy through a broker; the cooperative has preferred-
partner relationships with 485 brokers (in about 163 agencies). One of them is Christy Schwan, with Stellarus Benefits in Brookfield. “The cooperative has been very responsive to any issues we raise,” she says. “And they’re refreshingly lean. Rather than trying to create the entire wheel, they’re at the hub of things, bringing in resources as needed.”

Adds De Vita: “We have an advantage in that everyone on the team is seasoned, but we’re offering a new model. We say, ‘Let’s try that,’ because we don’t have a legacy. In that respect, I like being the newbie.”

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