HEALTH CARE/Joan Retsinas

An Insurance Primer for American Business

You own a business. Your employee health insurance tab has crept upward. You've tried the managed care route: prior authorization for specialty physician visits, exclusions for preexisting conditions, limited provider networks. Your deductibles are high. So are your co-payments. Your "maximum caps" are low -- too low to pay for substantive rehabilitation after a major injury. You already charge employees as high a premium as you think they -- or their unions -- would accept. As far as paring benefits, you have pared as much as you can stomach; your list of "not covered"s is so high that your employees are underinsured.

What to do?

Here is a "Steps to Take" primer.

First, if you do not already offer insurance, don't think about it. Hire young, healthy employees who will grudgingly accept longer vacations or membership in a health club in lieu of the costlier insurance.

If you do offer insurance, drop it. Health insurance is an optional benefit, like pensions. If employees object, tell them they are lucky to get a paycheck: You could easily outsource whatever they do to India.

By the way, if you insure your pensioners, drop coverage, or -- better yet -- scale it back. The companies that have dropped coverage for retirees have garnered some bad press. In comparison, the companies that have just ratcheted down benefits look munificent.

If you can't drop insurance, tailor it to long-term, full-time employees -- and skew your workforce to include more contract workers, more part-timers, more seasonal staff. Look to Wal-Mart for inspiration. They are the nation's largest employer, yet they don't provide health insurance for vast numbers of greeters, stockers and clerks.

If you are still stuck with lots of employees who are enrolled, on your tab, in a pared-down health plan, raise their premiums so high that some will drop out. Of course, you risk a tsunami of widespread employee discontent, especially if one of those employees is ill or has an ill child. S/he might even try to get a local reporter to pick up the story. You don't want to be a front-page feature: Scrooge entrepreneur abandons Tiny Tim.

The government, though, can help. Stick low-wage employees on public insurance. Every state has expanded Medicaid to cover children whose parents are employed, yet whose incomes are too low for conventional coverage. Some states have extended SCHIP to parents, even to adults without children. Although Congress intended SCHIP to help employees who didn't have health insurance at work, low-wage employees rarely can afford the high premiums of most workplace policies.

Make government -- sometimes your adversary -- into your ally. Encourage low-wage employees to go on SCHIP. Wal-Mart again has set the standard. In Arizona, 9.6% of the Wal-Mart workforce participated in SCHIP. Indeed, throughout the country Wal-Mart employees have signed on to government insurance. Wal-Mart is not unique. Dunkin' Donuts, Stop and Shop, Target, Home Depot -- many large companies that pay low wages have seen the opportunities.

Finally, don't despair. You can give your employees healthcare, and save money in the process, by outsourcing that care. Look to Mexico. Healthcare there costs 40-50% less than in the US. American employers operating near the border have done the math: They can insure far more employees for care in Mexico than in the US. Up to 160,000 Californians living near the border go south for care, according to a Los Angeles Times story (Richard Marosi, August 22, 2005). In Caleixio, Calif., one-third of workers travel to Mexicali for care. Several HMOs operating in Mexico are licensed in California.

If you don't live near the border, you still might find it cheaper to pay employees' transportation. Or maybe you should just move to some place where workers don't expect healthcare.

In another 20 years, if enough businesses follow this primer, the very notion of "employer-provided health insurance" will be obsolete.

Joan Retsinas is a sociologist who writes about healthcare in Providence, R.I. Email

From The Progressive Populist, Oct. 1, 2005

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