A health insurance agreement with Salinas Valley Health is a milestone.

I keep my health insurance card in my wallet, but I admit I’ve never spent much time reading the fine print on the back, mostly a list of phone numbers related to claims. The insurance cards of some 2,500 local people who are insured through MCSIG, plus their family members, have a similar back-of-card list, followed by the following proclamation in all caps: “NO MONTEREY COUNTY HOSPITALS ARE COVERED UNDER THIS PLAN.”

It’s a wild carveout, leading to horror stories of people seeking care in Santa Cruz, Santa Clara and elsewhere.

As of March 1, that carveout is no longer in effect, thanks to a new agreement with Salinas Valley Health, which now accepts patients enrolled in this low-cost plan.

MCSIG stands for Municipalities, Colleges, Schools Insurance Group, and started in 1982 as a joint powers authority, composed of various government entities that pooled into a collective insurance group. (The current insurance provider is Blue Shield – that little card with the now-outdated proclamation on the back bears the Blue Shield logo, which handles claims, but the coverage itself is negotiated by MCSIG leadership, not Blue Shield.)

Today, MCSIG has 27 member agencies, including school districts like Monterey Peninsula Unified, Carmel Unified and Pacific Grove Unified, as well as the City of Seaside. Employees of those agencies can choose to enroll themselves and their families in a plan. Most payors choose the PPO Select plan – the lowest-cost to the employee.

Each employer has its own contribution arrangement. Employees of Salinas Union High School District, for example, pay no monthly contribution for themselves for the most popular PPO Select plan, or $530.21 for a family. The next most popular plan includes better coverage – including at local hospitals – and costs $544.61/month for an individual, or $2,396.21 for a family.

The big takeaway from those numbers is something we already knew: Health insurance is expensive. And most people choose the lowest-cost option available and hope they will stay healthy instead of paying a ton for health insurance up front.

Local health providers, meanwhile, have the task of negotiating rates with various insurers, like MCSIG, Anthem or Blue Shield. They don’t get the opportunity to negotiate with government insurance providers Medicare or Medicaid, which reimburse at a standardized rate that pays less than the actual cost of care. With a large population insured by Medicare and Medicaid, that leaves local hospitals especially reliant on reimbursements from commercial insurance companies – the rates that they can bill MCSIG, Anthem and Blue Shield.

Salinas Valley Health and Anthem hit an impasse last year, finally negotiating a deal to keep at least 11,000 Anthem-insured patients in-network, a sign of how fragile these insurer-provider agreements are.

Negotiations with commercial insurers like MCSIG are a little different than those with a big faceless insurance company like Anthem because MCSIG has good, old-fashioned union organizing on its side.

Teachers union leaders Steve McDougall and Kati Bassler are both on the MCSIG board. They deal with all sorts of issues among members, but increasingly the top line is health insurance.

Bassler realized in 2019 after getting mammograms for a decade at SVH’s Nancy Ausonio Breast Care Center that suddenly, it was out-of-network. “I went marching over to MCSIG and said, ‘What’s going on here?’” she recalls.

It was the beginning of an education in health insurance.

MCSIG members stacked SVH board meetings, and MCSIG eventually negotiated a special agreement to cover mammograms – members would get a voucher to bring to the breast care center indicating it should bill MCSIG directly, rather than handing over their usual Blue Shield cards.

Perhaps the mammogram arrangement set the stage for successful negotiations regarding the PPO Select Plan.

“Our members win. They have an in-network hospital,” McDougall says. “Good on [SVH] for working with us on this. Maybe we can get similar things done with other hospitals.”

Already, union leaders have met with Montage administrators. SVH may just be the first domino to fall.

SARA RUBIN is the Weekly’s editor. Reach her at sara@mcweekly.com