HEALTH CARE: THE PUSH FOR REFORM
Workers left to foot the medical bills

Researchers say study shows gap, effect of rising costs

By Keith Darcé
STAFF WRITER

July 11, 2007

About 8.7 million of California's adult workers are not covered by an insurance plan sponsored by their employer, and 2.9 million of those have no health coverage at all, according to a report set to be released today by the Center on Policy Initiatives in San Diego.

Authors of the study said the results demonstrate the troubling effect of rising health care costs that have prompted many businesses to drop employee insurance coverage or raise employee shares of health insurance premiums to unaffordable levels.

The study also revealed a wide gap between higher-wage and lower-wage jobs when it comes to health care coverage for the state's 17.3 million adult workers.

Among manufacturing workers who earned an average of $59,748 a year, nearly 59 percent were covered by insurance plans sponsored by their employers. Among hotel and restaurant workers who averaged $16,848 a year in wages, 20 percent had health care coverage tied to their jobs.

That means more lower-wage workers are left seeking coverage through a family member's employer or the government, or going without insurance and relying on charity health care services.

“Some industries are doing their fair share of providing health insurance,” said Susan Duerksen, one of the study's three authors. “But others are doing a much worse job, basically leaving the cost to taxpayers, other employers and everyone else who pays for health insurance.”

Some industries that provide the least amount of insurance coverage, such as hotels and restaurants, construction and retail, are among San Diego County's largest employment sectors.

Joseph Pinckney, a buser at Bertrand at Mister A's restaurant in the Bankers Hill neighborhood of San Diego, knows firsthand the risk faced by the working uninsured. Pinckney, a recent college graduate, was left with $4,300 in hospital and doctor bills in March after a fall sent him to the emergency room with several cuts that had to be closed.

Pinckney, who has applied to become a U.S. Customs agent, said he lost the insurance coverage he had through his father's employer when he turned 23. His current employer doesn't offer any plans.

Pinckney said the medical bills are preventing him from moving out of a friend's apartment, where he sleeps on a couch. He worries about how he will pay off the medical bills when he starts paying his student loans next month.

“It's a scary thought. I'm worried,” Pinckney said.

Tom Nickel, owner of O'Brien's American Pub in Kearny Mesa, said he would like to provide health insurance for his nine employees, particularly those in the kitchen where turnover is less frequent, but he hasn't found an affordable plan.

“Long term, I think it's something that we will move toward,” Nickel said. “It's an inevitability.”

Vince Sollitto, vice president of external affairs for the California Chamber of Commerce, said low-wage industries have a much harder time providing insurance to workers because the cost of the benefit represents a much larger proportion of their overall labor costs.

The average premium cost for a health maintenance organization plan adds 20 percent to the cost of employing a worker who earns $10 an hour, Sollitto said.

“If you're an employer, you just can't afford an additional 20 percent to provide insurance,” Sollitto said.

The study comes as lawmakers in Sacramento debate proposals to reform the state's health insurance system to extend coverage to most of California's 6.5 million uninsured.

A proposal by Gov. Arnold Schwarzenegger would require businesses employing 10 or more workers to provide insurance or pay a 4 percent payroll tax that would help fund low-cost insurance. A bill backed by Democrats would increase the payroll charge to 7.5 percent.

The report also recommends that state and local governments use the power they wield through public contracts to require contractors to provide health insurance for their workers.

“Public works projects using taxpayer dollars should ensure that the jobs created by these projects have health insurance,” the report said.

That's already happening in San Diego, where companies with city contracts worth $25,000 or more must provide insurance to employees or pay them an extra $2 an hour in wages.

Return to : Single Payer Articles