Articles by Claire Guthrie Gastañaga
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Insuring Working Women's Health and Wellness:  Where Are We Going?               (Spanish)
Richmond WOMAN, Vol. 2, Issue 10, October 2004, pp. 6 and 10

In June, I had the privilege of addressing the 7th Annual Women’s Health Virginia Conference focused on working women’s health, and I served on a panel at the Governor’s Second Annual Conference on Virginia’s Uninsured.   Both were wonderful opportunities to learn more about a critical issue of concern toRichmond’s businesses and its women and their families – the high cost of health care and the consequent lack of affordable health insurance.

While experts share a common understanding of the problem, there is little common agreement about a solution.  What is clear, however, is that we can reduce costs is by preventing the diseases and injuries that cause us to require health care in the first place.

The Dimensions of the Problem

Lack of Insurance is A Significant Problem for Working Women and Their Families

An estimated 44 million people live without health insurance in the United States and roughly three quarters of a million of these individuals live in Virginia.  According to the Dean of the University of Virginia Medical School, 75% of Virginians without health insurance are in families with at least one full-time worker, and 60% of the working uninsured are employed by firms with fewer than 50 employees.

The problem is especially critical for women.  More than one-fifth of women with children under 18 lack health insurance.  Half of working mothers are not paid when they miss work to take care of a sick child.   Ten percent of all women ages 18-64 provide care to family members who are sick or disabled; 43% of these caregivers have a chronic health condition; 25% of caregivers are medically uninsured, according to “Women, Work and Family: A Balancing Act,” an Update on Women’s Health Policy, Henry J. Kaiser Family Foundation, April 2003.

Businesses and employees both agree that health insurance is an important benefit.  According to the Society of Human Resources Management (SHRM), employees consider health insurance to be the most important fringe benefit an employer can offer.

Reasons Why Working Virginians Are Uninsured

When it so widely considered such an important issue, why are so many working Virginians without insurance?  A number of factors account for this problem:

  • Cost:  Smaller employers say that they cannot afford to offer health insurance as a benefit.  For example, 76% of women entrepreneurs at the Women Entrepreneurship in the 21st Century Conference said that cost was the biggest obstacle to providing health insurance benefits (refer to http://www.dol.gov/21cw/Women_3_18/Conference_Report.htm).
Insurers charge small firms more per employee for health insurance than they charge large firms.  Premiums for all businesses increased by 12.7% in 2002m which presents a problem for every employer, regardless of size.  At the same time, however, premiums for firms with between 10 and 500 employees rose 18.1%.  Smaller firms routinely face the highest rate of increase.

High cost is also a factor for employees.  Even when firms do offer health insurance, not all eligible employees enroll.  This is particularly true for lower wage employees and employees at smaller firms.  At firms with fewer than 25 employees, only 13% of eligible employees earning less than $10 an hour enrolled in a plan for which they were eligible, while 42% of those earning $10 or more hourly enrolled.  At firms with greater than 25 employees, 46% of workers making less than $10 were enrolled in an available health plan contrasted to 79% of those making $10 or more.   (“The Uninsured US and Virginia,” presentation by P.J. Maddox, Second Annual Governor’s Conference on the Uninsured, http://cnhs.gmu.edu/imv/agenda.html).

Part of the problem for employees is that benefit premiums for health insurance have risen faster than wages.  While premium costs were up by almost 13% in 2002, wages rose only 4 %.  Since most employers do not offer fully paid insurance, the disparity between wage increases and premium increases makes insurance less and less affordable even where available.  (Id.).
  • Lack of knowledge: Another reason businesses do not offer insurance coverage is lack of knowledge. According to a Kaiser Family Foundation Survey, one-third of the businesses surveyed that were not offering health insurance coverage admitted that they did not know how much it costs.  Those who said that they did know overestimated the average premium cost by $40.
Half of small firms responding to another survey said that they did not know that health insurance premiums are 100% tax deductible to the employer.  Over half believed incorrectly that employees purchasing insurance on their own could deduct 100% of their premiums.
  • Administrative complexity and resource issues: Small business owners do not have staff, time or resources to manage the administration of benefit programs.  Small business owners who do not have ready access to human resources professionals are overwhelmed by the amount of information about benefit options and put off by regulations (ERISA, for example).
What Are Policy-Makers Doing To Fix This Problem?

Mostly, policy-makers are debating what should be done and by whom.  The presidential candidates have competing solutions.  President George W. Bush endorses association health plans as a method to reduce costs for small business. His challenger John Kerry offers refundable tax credits and entrance into the Congressional health plan.  Lieutenant Governor Tim Kaine has convened a small business commission to investigate options at the state level. He plans to present legislation in the 2005 session of the Virginia General Assembly. The bottom line is that it is unlikely meaningful change will occur soon at either the federal or state level that would significantly affect either affordability or accessibility of health insurance or would reduce health care costs.

What Can We Do?

What then can individual women, business owners and community leaders do to help address the high cost of health care and health insurance while we wait for policy makers to act?

Some communities (with or without state support) are already exploring alternative ways of providing lower-cost access to health care for the uninusured.  One such community-based initiative is Project Access, a physician initiated program started in North Carolina that is now being replicated in Roanoke and Danville (www.apaonline.org).  Another alternative model is the Muskegon Community Health Project ( www.mchp.org).

There is one step that we can all take, however, to reduce health care costs and, consequently, to increase affordability of insurance.  We can work together to prevent injuries and diseases that drive up costs.  We must make individual lifestyle choices for ourselves and our families, run our businesses (including hospitals) safely and in a way that encourages health and wellness, and we must adopt public policies that encourage investments in prevention.

The Health Advancement Research Organization (HERO) points out that most of the current experimental means of reducing the cost of health insurance are

“ … economic: increas[ed] premium cost for employees, higher co-pays, reduction of benefits, employee-driven health care plans and health saving accounts.”   HERO argues that “[t]hese approaches have questionable potential to control costs in the long term, because the problem is a health issue…more specifically, it is a lifestyle choice problem. Obesity, smoking, inadequate physical conditioning, inability to manage stress, poor nutrition and similar lifestyle choices are the cause of 50% to 70% of all illness and medical problems,” and, consequently, these factors have led to the high cost of care and insurance.

Obesity alone is a major contributor to the health care cost crisis.  Health care costs for a person who is morbidly obese are 36% higher and medicines for morbidly obese persons cost 77% more than cost for people who are not obese ( “Countering A Weight Crisis” by Robert Grossman, HR Magazine, March 2004)

According to Glenn Gaesser, professor of exercise physiology at the University of Virginia and author of Big Fat Lies: The Truth about Your Weight and Your Health (Gurze, 2000), improved fitness alone can reduce risk of major diseases by 25 to 50%.

The federal Department of Health and Human Services (HHS) estimates that health promotion and disease prevention programs result in median savings of  $3.14 for each dollar spent.  (HHS 2003 Report, Prevention Makes Common “Cents”).

Injury prevention is less expensive than correcting problems after they’ve occurred.  The American Association of Safety Engineers estimates that for every $1 invested in a safety and health program, $4 to $6 is saved as a result.

Business has proven that enhancing wellness works to reduce costs. HHS estimates that 80% of workplaces with more than 50 employees and almost all employers with 750 workers or more offer health improvement programs, most with an obesity component.   Bank of America conducted a health promotion program for retirees.  The cost was $30 a person; insurance claims were reduced by an average of $164 compared to a $15 increase for nonparticipants.  Coca Cola reported savings of $500 per year for employees enrolled in their fitness program.  Prudential reported a reduction of major medical costs from $574 to $312 for each participant in their wellness program.  (Worksite Health Promotion Directory, www.jointventure.org).

Clearly, both business owners and employees can contribute to reduced health care costs by investing in wellness and practicing prevention.  And, each of us as individual women can have a meaningful impact on the health care cost crisis simply by choosing healthy lifestyles for ourselves and for our families. (end)

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