Dino Velazquez finds himself on the receiving end of the healthcare trend. Ten years ago, the CEO of Dothan Chrysler Plymouth Dodge in Dothan, Alabama, dropped his coverage with Blue Cross/Blue Shield because he thought it was too expensive. But Mr. Velazquez later had problems with his new insurer, which declined to pay certain types of coverage. He hunted for another carrier and again found Blue Cross to be his best option, but the company had decided not to insure car dealerships in Alabama. A few years later, Blue Cross changed its policy once again and accepted Dothan Chrysler. The dealership’s insurance rates have skyrocketed since then.
Last year, Mr. Velazquez passed along a nearly 20 percent premium increase to his 75 employees. “I had no choice,” he says. “I had to stay profitable, and the increase was too astronomical for us to take the hit.”
Every employee paid the increase, in part because Dothan Chrysler’s health plan, while expensive, gets high ratings from industry watchdogs, according to Mr. Velazquez. He hasn’t decided yet how to handle the next premium increase. “I don’t want to think about it yet. I’ll decide what to do when it happens,” he says.
Mr. Velazquez suspects that his employees, like himself, pay more because they have little choice. Workers once took affordable and complete health coverage for granted, the CEO notes, and it remains a major perk in job recruitment. “The first thing many people ask when they apply for work here is, ‘What kind of insurance do you have?’ They have been through the drill at companies that have little coverage or none at all,” Mr. Velazquez explains.
Most proposed solutions for the healthcare crisis look to thefederal government for guidance. The last time the nation’s capital focused on health costs was 1993, when President Bill Clinton proposed an ambitious framework for federally managed care. The Clinton plan turned into a political debacle. As a result, other Washington politicians learned to shun any comprehensive tampering with the healthcare system. Instead, Congress and the White House have put forth minor adjustments to the system. For example, the Bush Administration and Congress are considering proposals for tax credits to provide short-term health insurance coverage for uninsured workers.
If premiums rise as the NCHC study predicts, health costs could gain traction as a political issue during the next few years. But political observers concur that Congress won’t pass meaningful health legislation this year.
In reality, only a combination of federal, state, and private-sector initiatives can solve the health insurance crisis, industry executives say. The industry should come up with its own solutions, even if that means putting a cap on certain types of coverage, Mr. Milian believes.
Prescription drugs rank high on the list of places to cut costs, Mr. Milian continues. Miguel Fernandez, CEO of Physicians Healthcare Plans, the number 15 company on the HISPANIC BUSINESS 500, agrees, saying “it’s an insult to hard-working Americans that thousands of them, including Hispanics, go across the borders to Mexico and Canada to buy drugs that cost 40 to 60 percent less than in the United States.”
Another option to reduce costs would be plans that cover primary-care doctors and specialists, but cut back on hospitalization and pharmacy pay-outs. Physicians Healthcare expects to introduce such a plan for businesses this year. “This can lower costs because hospital expenses and prescriptions account for about 60 percent of premiums,” says Mr. Fernandez.
Mr. Milian recommends that some financially squeezed small businesses trim costs by offering plans that cover only health catastrophes. “I tell them to worry about the big hospital bill, and put a large deductible on prescriptions and accept a higher co-payment for office visits,” he says.
Along with many other CEOs, Mr. Velazquez plans to weather an economic storm that now appears out of control. “Like any business, an insurance company will do what it must to make money,” he reasons. “If you’re a small company, and you have a few workers with serious health problems, you can take it to the bank that your rates will rise.”
Rivera Spearheads NY Health Bill
In an era of ever-tightening healthcare budgets nationwide, Dennis Rivera has pulled off what many in New York must have thought unlikely: a salary boost for the state’s vast network of health workers.
Mr. Rivera, president of the influential hospital workers’ union 1199 SEIU, helped broker the Health Care Workforce Recruitment and Retention Act, signed into law in January. The $1.85 billion initiative, to be funded in large part through a 39-cent cigarette tax hike, provides for salary, training, and benefits increases for New York health workers. With the increase, cigarette taxes in New York are $1.50 a pack – the highest in the nation.
Behind-the-scenes deal-making has become commonplace for the 50-year-old Mr. Rivera. His union, which includes nurses and other health workers in New York City, Long Island, and upstate New York, has more than doubled in size since he was first elected president in 1989. With 210,000 members, 1199 SEIU is the largest healthcare union in the United States. Mr. Rivera was re-elected to a fifth three-year term as 1199 president in April 2001.
“He has been a forceful advocate for healthcare workers and quality healthcare in New York,” says Robert Hinckley, spokesperson for the state health department.
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