James Barber is issuing a warning for business owners in Los Angeles and across the state. Eventually, he said, the population of uninsured Californians will reach a level that can no longer be ignored, and the state may be stuck with a costly government solution. Business owners have long protested government run health insurance, and Californians revisited the issue at the polls in November. After enormous marketing campaigns on both sides, Proposition 72, which would have upheld legislation requiring employers with over 50 workers to provide health insurance, was defeated on Nov. 2. The proposition was widely opposed by business groups which said that the cost would force some businesses to close. Health care experts in Los Angeles are relentless in spreading their message to California businesses that while they may be claiming victory now, they are still facing a major health care crisis. California spends $112 billion on health care, more than any other state, but its uninsured population continues to grow well into the millions. Barber, president and CEO of the Hospital Association of Southern California, is urging businesses to take action in ensuring that its workers are covered or risk seeing the state dictate health coverage. “We have an employer-based system that we would like to preserve,” Barber said. “I’m here to tell you, if this doesn’t get addressed we will have a government solution on our hands.” The business community, Barber said, will end up paying for a solution in any scenario since a state run program would be funded by an increase in taxes. Barber said that despite the millions of uninsured California residents, the majority of the population has not become sufficiently outraged to demand a system that is more affordable and more accessible to those who need it most. George Kieffer, chairman of the Los Angeles Area Chamber of Commerce, said the chamber was prepared to take a more active role in the coming year in championing the cause of the state’s uninsured workers. The portion of the population he identified as most problematic was the “working poor.” Kieffer said that 2.5 million people, roughly 45 percent of the state’s uninsured population, are working full-time without any health insurance benefits. At a recent meeting for small business owners, a show of hands during a presentation of health care options revealed that most business owners in attendance did not currently offer health coverage, but were interested in learning how to do so. To them, Carla Magarity, owner of Woodland Hills-based Time Employee Benefits, said that there are health plans to be found for every business owner’s budget. Magarity said that businesses can opt for an “elect plan,” which allows employees to choose between several coverage plans. Employees under 30 can choose between plans that cost between $81 and $324 per month, she said. “The one thing we are not lacking in is choice,” Magarity said. “There could not be a reason why an employer would say ‘I don’t want to do this because I’m going to make a decision that one size fits all for my employees.'” Brian Sassi, general manager of the small business division for Blue Cross of California, said that the company has found that small business owners face a number of barriers, both real and imagined, in buying group health insurance. Misunderstanding The complexity and number of plans available is a headache, Sassi said. Furthermore, most business owners have a limited understanding of the concept of group insurance. Sassi said that most think they’ll spend hundreds of dollars on each employee every month to pay for insurance. Sassi said that Blue Cross spent close to a year trying to overcome these obstacles. For the first six months of 2004 he interviewed small business owners, and developed a new benefits package over the next four months. “We wanted to make these plans easier for employers to access and afford,” said Sassi. The end result of their efforts is BeneFits, a benefits package effective starting this month that offers a choice of five different plans to employers. The benefits start at a basic level, coverage for catastrophic events to shield employees from crippling hospital bills, which increase from there. In order to attract employers, the Blue Cross allows them to contribute as little at 25 percent of the premium costs, while employee participation requirements are reduced to 60 percent. Sassi said the package is something completely new for Blue Cross and that in order to make sure its marketed properly, the company has arranged over two dozen education seminars for its brokers and agents. Sassi said the company wants employers to understand immediately that they don’t have to make a choice about plans, that decision is up to each employee. For some business owners, however, their decision may not hinge on the cost of health care coverage. Gaining trust Betty Jo Toccoli, president of the California Small Business Association said research has shown that small business owners trust information coming from each other much more readily than advice from government agencies. She said that insurance companies should be prepared to talk to a small business at least half a dozen times before that business becomes a client. Dr. Hector Flores, who started Family Care Specialists physicians group along with six other doctors in 1988 said that even with rising costs, small business owners not offering health insurance to their workers are making a big mistake. Flores said that the businesses’ policy has been to offer full health coverage and premium payments for all of its employees, and to offer the same plan to all employees, physicians or not. “We decided that the same health plan that would cover us would cover our employees,” Flores said. “If it’s good enough for us it’s good enough for them and it would also hold us accountable for finding the best value for our entire company.” Flores, who said that the business also offers salaries at the 75th percentile in the state, said the result of those policies has been higher productivity and morale due to lower turnover “Nothing is more costly than employee turnover, especially after we train them and provide them with expertise that someone else will benefit from,” Flores said. “We also know that if you don’t provide health care benefits there is that loss of productivity. As an employer we cannot afford to not offer health insurance.” Family Care physicians group has seen its premiums rise astronomically, Flores said. He warned businesses, however, that employees without coverage will find other ways to costs their employer money. “What I see as a physician many times is employees from companies that don’t offer health insurance, they come in with quote unquote workers’ comp injuries. What they really want is for me to take care of their headaches or backaches or diabetes or high blood pressure. It has nothing to do with their work, but that is their only access point.” Still, as most workers and business owners know, most companies are not willing to shoulder 100 percent of premium costs. Many employees, according to Dr. Neal Kaufman, professor of pediatrics and public health at the UCLA Center from Healthier Children, Families and Communities, will decide to drop their coverage altogether if the premiums rise too much. “When I encourage employers to do anything, it’s to be creative to offer a wide range of options to your employees so that they don’t go without coverage,” Kaufman said.
