Ouch!

Families in Wisconsin are spending more money on health care insurance premiums than they were four years ago, while their wages have risen at a much slower pace, according to a report recently released by Families USA, a nonprofit group for health care consumers.
The report says the average Wisconsin family is paying 49.3 percent more for health insurance premiums in 2004 than in 2000, while the same family’s earnings only rose 12.2 percent during that time.
Kathleen Stoll, director of health policy for Families USA, said the study has shown not only a dramatic increase of workers without health coverage, but also large numbers that are under-covered.
"They don’t have real security," she said. "We’re seeing a thinning of coverage, and in the end they will pay more one way or another."
According to the study, only seven states, including Minnesota and the District of Columbia, had higher health care premiums than Wisconsin during the same time.
That means Wisconsin’s workforce is being squeezed from both ends, as health care costs rise and wage increases can’t keep up, according to John Goldstein, president of the Milwaukee County Labor Council.
"The most dramatic change is that we have tens of thousands of workers that had health care coverage that no longer do," Goldstein said. "There are employers that no longer offer plans. And second, as employers require higher co-pays, there are fewer that can afford them."
Many workers are being told when they are hired by companies to directly apply for the state-run Badger Care, because the employer is no longer offering health coverage.
And even for middle-class workers whose employers offer health coverage, the costs can be staggering.
"Middle class workers are being squeezed on college tuition for their kids, gas costs, so many different places," Goldstein said. "No place is bigger than what they are contributing to their health care in terms of deductibles, prescription costs and copays. Some of the stories are pretty tragic when you talk to workers about health care. You can talk to someone who thinks they have a pretty good job, but their personal finances are devastated by a chronic illness even though they are insured."
People who have lost their jobs during the recession are even worse off, said Roger Hinkle, dislocated worker service manager for the Private Industry Council of Milwaukee County.
"I see plenty of people without insurance once they are laid off," he said. "That’s a humongous worry for people … Cobra coverage is very expensive. Whatever cushion was there is gone -you’re picking up the whole bill."
While workers are feeling the pinch from higher premiums, employers say there isn’t much they can do because health care costs are rising so much that they are forced to pass more of the costs on to their employees.
Joseph Priote, owner of the Layton Fruit Market on Milwaukee’s south side, has 10 full-time employees. He said the company, which has both a produce market and mail-order business, was again hit with skyrocketing employee health insurance rates this year, and he needed to explain that to his employees.
"They (the employees) pay $12.50 per week toward the insurance, and we pay the rest," he said. "It’s wonderful for them. But the biggest problem with that is they don’t understand what it’s costing the company. I was explaining to them that we’re paying $2.88 per hour for every employee for their health insurance, and they had no idea."
Priote said his company will likely have to raise the employees’ deductible or switch to a major medical style policy, resulting in him and his employees paying more out of their pockets for health care.
He’s bracing himself for more increases in the future.
"The full coverage (policies) like you used to have, you will never see again," he said. "Every year, we’re taking less service so our premiums go up 12 or 13 percent rather than 30 percent. You’re getting less service for more money."
Deron Butler, co-owner of Joseph Douglas Homes, is in a similar situation. His company, which has been in business since 1999, has only had a staff of full-time employees for two years.
Now, with 18 employees, Butler has had to deal with rising health insurance costs by both changing plans and raising deductibles.
"Every year, it’s getting harder to do," he said. "We’re running out of options. We’ve changed the styles of plans, and the employees and company are paying more."
Butler said his company will be going through the same cycle this year, as he and his partner review carriers and their rates. Ultimately, both his company and his employees will be paying more out-of-pocket costs for health care.
While small companies might be forced to deal with the issue on their own, some large companies in southeastern Wisconsin, including Rockwell Automation Inc., Harley-Davidson Inc. and Miller Brewing Co. have formed the Business Health Care Group of southeast Wisconsin. The group, which is seeking lower health care rates for its members, was formed as a limited liability corporation in January 2003.
Dianne Kehl, executive director of the group, said about 45 corporations have joined the coalition, working to make health care more affordable for employers and consumers in the Milwaukee area.
The coalition recently compiled a list of its goals, Kehl said. They are:
¥ To transform the health care delivery system through developing market driven strategies.
¥ Creating data transparency.
¥ Supporting consumerism.
¥ Collective purchasing.
¥ Promoting accountability for the consumer, the provider, the employer/sponsor and the administrators.
"The business community understands that it needs to stay united, stay active and involved in negotiating its health care costs," Kehl said. "They were passive in the past. That’s how we ended up with the providers being in control. We’re in the process of getting that control back."
Four of the group’s members have already implemented maximum allowable charges. Kehl said the group also is intending to start collective purchasing for its laboratory work, as well as for pharmaceuticals.
"One of our strategies is to create a high-performance network to work closely with the provider community," Kehl said. "We want to work together to create a solution that is focused on good outcomes."
Those outcomes are in both the best interests of the corporations and employees that are purchasing health insurance, Kehl said.
"It’s a severe economic issue for our community," she said. "If they (health providers) drive jobs out of Milwaukee, they’ll be the loser, because no one will be there to buy their services."
October 15, 2004, Small Business Times, Milwaukee, WI

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