Lack of health plans a worrisome trend

By PATRICIA NORRIS

AnnaRosa Rotundo of Holyoke thought she had it made when she was hired as a medical assistant with full benefits at the University of Massachusetts three years ago.

For $100 a week, the 35-year-old mother of four was able to cover her entire family under the university's insurance plan.

Then she got laid off - an unexpected detour that has left her on a sixth-month odyssey to find another job with health-care coverage while her children's care is shifted to the Medicaid rolls.

Rotundo's story is not unusual.

Companies reducing employee health plans or failing to offer them in general are becoming more common, forcing many families to do without or rely on the government for assistance.

Friendly Corp. in Wilbraham garnered statewide ire last month after it reduced health care benefits for 129 restaurant workers in Massachusetts, a move that was criticized by labor figures and sparked protests at both ends of the state. Friendly, Wal-Mart and Stop & Shop are among the companies in the state with the highest number of employees receiving health coverage from Medicaid, according to the office of Health and Human Services. Wal-Mart topped the list with 2,866 people who relied on MassHealth or the state's free care pool. The estimated taxpayer cost to provide health care to those workers and their dependents: $7.9 million.

Stop & Shop was second with 2,737 workers who either were enrolled in MassHealth or utilized the state's uncompensated care pool. Friendly was 11th on the list with 886 employees utilizing public benefits.

"(The disinvestment) trend is definitely worrisome to us. Some of the things we are hearing from clients that is taking place out there ... Employers are reducing worker hours so they no longer qualify for full-time benefits, or the employers have increased the employee share of the health plan up to an extent where it is no longer affordable," said Sonia Bouvier, director of Hampshire Health Connect, a service that helps connect the uninsured with supplementary coverage at Cooley Dickinson Hospital in Northampton.

At the state level, the battle to make everyone pay their health-care share is becoming more desperate as businesses, many who are legitimately flailing with insurance expenses, reduce plans or cost-shift by adding such things as higher co-pays for their employees, while the uninsured rack up more costly medical bills after being unable to afford preventive care.

The state legislature and Gov. W. Mitt Romney are championing plans to get more Massachusetts residents insured, but no one can seem to agree how to pay for the measure, according to legislators.

The House has proposed small businesses - those with more than 10 and up to 99 employees - pay a 5 percent payroll tax, among other things, to offset funding. Those small businesses who offer health insurance would get that tax money back from the state, according to state Rep. John Scibak, D-South Hadley. That plan is backed by health care advocates such as Health Care for All.

The Senate bill for coverage does not include the tax but would make employers with more than 50 employees pay medical bills for uninsured workers. Both Romney and the House plan would also mandate that everyone have health insurance in the same way everyone who drives a car has car insurance.

The two legislative bodies are haggling over a compromise in a conference committee but time is running out, according to Scibak. The state spent $213 million during the 2005 fiscal year to pay for the health care of about 160,000 employees and their dependents covered under MassHealth, the state Medicaid program, including free care provided by hospitals - about four times what the state estimated last year. Some employees also opted for state care rather than their company-offered subsidized plans if they qualified.

If Massachusetts does not deal with the more than 400,000 uninsured people in the state, millions of federal dollars are at stake, Scibak said.

"We are in jeopardy of losing $385 million dollars in federal money. That is what is on the table here. The government has already begun reducing (Medicaid) money to other states who are not pursuing this issue aggressively," Scibak said. "That is why the clock is ticking. They (the feds) were hoping we would have had a plan in place by Feb. 1."

But Christopher P. Geehern, executive vice president of Associated Industries of Massachusetts, said neither bill will reduce health care costs for employers.

"They address the expansion of coverage, but there is nothing in there that will reduce costs, and this is hurting a lot of employers," said Geehern, whose organization represents 7,600 businesses, most of whom are against the payroll tax but continue to offer some benefits to their employees. "... There is a point of financial no return," he said.

John McDonough, executive director of the reform group Health Care for All, said companies would do well to look to their brothers in business who don't offer plans, pocket sizable profits and then drive up costs for everyone because they have left their employees to get care on the taxpayer's dime.

"It comes down to a question of fairness. Why should employers who are paying steeply to cover their workers pay extra to finance coverage for employers who don't cover their workers? Why should the taxpayers pay more?" he asked. "Most employers continue to provide decent coverage for the workers. Some do because they have to and some do because they cannot imagine not doing it."

Part of the reason that money makers such as Wal-Mart have so many employees relying on the state for care is that the labor movement has weakened considerably, according to Michael Meeropol, chairman of the economic department at Western New England College in Springfield.

Although Wal-Mart may offer health insurance to its full-time workers and extend it to their part-time force, that does not always mean it pays wages that would allow workers to afford its plan. According to the Massachusetts Public Health Assistance report, "Many employees report cost as the primary factor in declining offered coverage." The same report did detail that many employers offered subsidies (the median subsidy is 77 percent) that were usually reasonable - $80 a month for an individual plan and $239 for a family plan.

"Unions are disappearing," said Meeropol. Such labor organizations often negotiated better pay and better benefits, he said.

Where the United States was once "top dog in economics between 1945 and 1970s, we stopped being king of the hill," Meeropol said. Changes in competition overseas, among other issues, have changed the business landscape here, he said. With that economic shift, the social compact between employer and employee eroded.