How They Would Change Health Care: McCain

High as they are, members' premiums cover only half of MCHA's costs. The leftover losses -- absorbed by fees on some insurance companies -- have been growing fast. They more than doubled in six years, to $120 million in 2007, and are rising this year more quickly than expected, with recent estimates close to $150 million.

"I don't know how you run a thing with a $120, $130 million loss a year. It seems to be getting a bit large," said MCHA's board chairwoman, Kathy Mock, who is also vice president for public affairs at Blue Cross Blue Shield of Minnesota.

As the program is getting more expensive, fewer insurers are helping to pay for it because of a federal legal quirk that exempts self-insured companies. As a result, the losses are being spread among a shrinking group of commercial insurance carriers. Gruber called it ironic that the Minnesota government in 2005 became self-insured for state workers, so even it no longer chips in.

McCain has said that, under his guaranteed access plan, the federal government would cover half the cost of such pools, with the rest paid by states and the insurance industry. In the spring, Holtz-Eakin estimated that the federal share might be $7 billion or $8 billion a year. "It's going to be twice that, realistically," he said in a recent interview.

Minnesota has been getting a small amount of federal help lately, through grants Congress approved to subsidize people with low incomes. The money, though, has been unpredictable. MCHA recently decided to let people with slightly higher incomes qualify for that help, only to discover that its grant this year was less than the last one. That means each eligible person will get a smaller check.

In such an environment, members such as Derichs are grateful for the coverage but resentful of its price. MCHA has helped Derichs pay for a hernia repair this spring and the expensive drugs she takes for lupus. She is scheduled for a second foot surgery next month.

Yet her monthly premium has gone from $389 when she joined two years ago, to $439 when she turned 60 last winter, to $506 with a rate increase in June. "Oh, man, it's almost too much," Derichs said.

"I guess the thing that kind of saddens me is, we were people who did put money aside for retirement. We weren't planning to go to Hawaii or Florida for six months -- just a comfortable retirement," Derichs said. Paying for MCHA "is a real struggle. It's almost to the point people say, to hell with it. . . . But our priorities at this point are, yes, we need health insurance, because we have health situations. Right now, we can't take that chance."