Health care insurance costs are STILL blowing up!!:
nytimes.com
Frustration Grows With Cost of Health
Insurance
By SAM HOWE VERHOVEK
ACOMA, Wash., Sept. 16
— Eddie Williams, 30 years
old, counts himself lucky to have a
good job, making $17 an hour as
a deliveryman for the Bowman Oil
and Propane Company. He and
his wife are careful about their
budget, and so have been able to
sock away some savings for their
daughter, Tianna, 6, and their son,
Kendan, 4. They were able to
vacation in Southern California this
summer and visit relatives in
Nevada.
But all their planning got a jolt a
few weeks ago, when health
insurance premiums for the two children abruptly shot up by 40 percent
— to $350 a month from $250.
"Of course you ask yourself why," Mr. Williams said. "You even wonder
whether it's worth it to pay all that. The children are healthy. Seems like
they've only gone to the doctor twice this year, both times for shots,
which weren't even covered by the insurance. But these are my kids
we're talking about here. You never know what might happen. So we
pay it. I wouldn't dream of them being without insurance."
With health insurance premiums across the country rising by 10 percent
and in some cases much more in recent months, millions of people like
Mr. Williams, and often their employers as well, are grappling with a
soaring expense that stands in odd and vexing contrast to many other
items in their budgets. Even as consumer prices actually fell over all last
month for the first time in 14 years, according to a federal report issued
Friday that said the decline was largely attributable to a drop in gasoline
prices, health care costs are on a seemingly relentless rise.
And for workers, managers and the owner at Bowman Oil and Propane,
such higher premiums produce strikingly similar cries of frustration. They
all wonder why the increases are so large and express puzzlement and
anger at the economic forces driving them. They say the larger premiums,
which insurers say are caused by the rising costs of prescription drugs,
and more generally by the escalating demands for medical services, are
playing havoc with their budgets.
Here at Bowman, the owner and president, Bob Bowman, recently
instructed the general manager, Dan Knelleken, to hold off on wage
increases until at least January, when the company faces another possible
increase in the premiums it pays for its employees. Actually, as far as Mr.
Bowman and Mr. Knelleken are concerned, employees already received
something of a wage increase, when the company absorbed a 10 percent
rise in premiums over the summer.
"I told people here at the time — you're getting a dollar-an-hour raise,
whether you see it in your paycheck or not," Mr. Knelleken recalled.
And both he and Mr. Bowman described the expense of increased
premiums as coming "straight off the bottom line," since it was not passed
on in the form of higher prices for the company's heating oil and propane
customers.
Bowman is one small company, with about a dozen full-time employees
and an additional 20 or so seasonal workers in the winter, when demand
for heating oil is highest. But the problems it faces managing health care
costs are typical of those faced by thousands of small businesses across
the country, which in turn have produced a chorus of fury and stoked a
major issue in the presidential and Congressional campaigns this year.
Both parties have proposed major plans aimed at controlling health care
costs, and especially at bringing down the prices that consumers pay for
prescription drugs.
Health insurance costs are so high that more than 40 million people
across the country have no insurance at all, which is also a major
campaign issue.
But many workers continue struggling to afford the premiums. People like
Mr. Williams contend with rising premiums for their dependent children,
which are often largely the responsibility of the employee, and often
worry about the burdens on elderly parents as well. Mr. Williams's
mother faces payments of $450 every three months for a battery of
prescription drugs for a heart problem. And employers like Mr. Bowman
seem to feel equally trapped, describing health insurance as a benefit they
must provide to find and keep good workers in the strong economy, but
one whose costs they feel powerless to control.
Bowman is part of a "purchasing pool" of about 350 local companies
here that is administered by the Tacoma-Pierce County Chamber of
Commerce, whose president and chief executive, David Graybill, said
premiums had risen by an average of about 20 percent this year.
The companies have some ability to pick and choose among large
insurers but, as Mr. Graybill put it in an interview: "When the higher
premiums come in, there's an immediate disbelief. But then they start
shopping around, and they find that kind of increase is more the norm
across the board."
And while in some cases small companies have contained costs by
cutting back on benefits or passing premium increases to the employees,
many employers like Mr. Bowman said they felt they had little choice but
to absorb much of the cost, leaving them sounding just as angry as
individual consumers.
"The gigantic companies have this attitude of `take it or leave it,' "
explained Mr. Bowman, a bald, jovial man, dressed for work the other
day in khakis and a Hawaiian shirt. "It's the same thing we see with Arco,
or U S West," he added, referring to the oil giant and the regional
telephone company. "They have the upper hand. They say, this is the
price to pay. Medicine and health care are no different these days."
Individual workers at Bowman, like Mr. Williams, the driver here, feel no
different. Mr. Williams himself is insured through the plan at Bowman,
which costs the company an average of $201.01 per worker a month,
$30 of which is paid by the employee through a payroll deduction. The
employees can also pay to cover a spouse, for $230.65 a month, and
children, for $105.75 per child.
After careful consideration of the benefits offered by the Bowman plan
and the one used by the Seattle crane company where his wife is an
administrator, the Williamses insured the children through her plan, which
was about $40 a month more but had lower co-payments and other
advantages. But that is the plan that shot up $100 a month.
"It just seems like an unbelievable amount of money," Mr. Williams said.
"I mean, you could practically rent a doctor's office yourself for that kind
of money."
David Holden, 40, a driver with the company for 10 years and a single
parent, also pays the premiums for his two children, but worries about
the next increase.
"These aren't cost-of-living-type increases," Mr. Holden said. "When
something shoots up 20, 30 percent, it's way beyond that." Like Mr.
Williams, Mr. Holden believes he is paid well, and with time-and-a-half
for overtime, his financial picture is solid. If the premiums soar again, he
said: "We'd start cutting back on nonessential things, movies, recreational
activities. But I worry about where we'd start cutting after that."
Here at Bowman, where the company motto — "Always There. Always
Fair." — is emblazoned on trucks and tanks, the people who run the
place are no less pained by the cost of insurance.
"Years ago, we tried a program where we were able to carry the
dependents," Mr. Knelleken said in an interview at the company
headquarters, a small building in Tacoma's gritty industrial area with a
spectacular and unobstructed view of Mount Rainier.
"Now we can't do that," Mr. Knelleken added. "We looked at it again
last year. We thought, `It would really be great to do this.' But the
numbers were just too astronomical."
Bowman intends to keep offering insurance, but not all small companies
feel that way. A national survey of small businesses released this month
by the National Blue Cross and Blue Shield Association and the
Employee Benefits Research Institute found that one in seven companies
with fewer than 100 employees said they would drop health insurance if
premiums increased by 10 percent, and 46 percent said they would
change their coverage, presumably to policies that are less expensive but
also less comprehensive.
Here in Tacoma, Mr. Graybill, at the chamber of commerce, said that he
hears complaints all the time about rising premiums, but that most
companies seemed intent on maintaining coverage for their employees, at
least for now.
"It helps that the economy is very good," he said. "I think we'd hear real
screaming if this was coming in a time when the economy was extremely
sour."
Some drivers work only in the winter months for Bowman, when the
company reaches peak demand from its 12,000 heating oil customers,
spread over five counties. They are covered for insurance during the
months they work, then have to decide whether to pay for the plan
themselves in the other months. Some, especially those without children,
simply take their chances and let their insurance lapse in the off months.
"I've had drivers just drop the insurance," said Robin Bowman, the
company's accounting department supervisor and a daughter of Mr.
Bowman, the owner. "I say, what do you mean you're going to drop it?
They say they can't afford to have it. And in the back of my mind, I'm
worrying and thinking, how can you afford not to have it?" |
