A new report points up
reasons for optimism
and action BY LINDA ZESPY
Among executives and employees alike, talking about the state of health insurance in this country is about as popular as a trip to the dentist. But a new report from the Institute for the Future of Aging Services (IFAS) at the American Association of Homes and Services for the Aging does more than just recap the bad news about the spikes in costs and dips in numbers of insured caregivers. Health Insurance Coverage for Direct Care Workers: Riding Out the Storm, published by the Better Jobs, Better Care program at IFAS, paints an informative portrait of who the uninsured long-term care worker is, why LTC companies have such a difficult time providing coverage, and how some companies have been able to overcome the obstacles and extend coverage to more caregivers.
First, the Bad News
The numbers are overwhelming: One of every four direct care workers lacks health insurance coverage. That’s approximately 50% higher than the general American workforce (people under the age of 65). Moreover, 40 to 45% of home care aides lack coverage, as well. “These [direct care workers] are the folks who do 60 to 70% of the care of the elderly and people with disabilities,” says Robyn Stone, executive director of IFAS, “who themselves don’t have access to real good coverage. [Those] who are caring for us aren’t doing much better.”
Why are long-term care workers hit so hard compared with the general public? A portrait of the typical American without health insurance provides clues. “Uninsureds” are often low-wage workers, usually in service occupations. Those with a high school education are more likely to be uninsured, as are minorities and foreign-born workers.
Especially hard hit are the LTC workers who work for themselves (as in home healthcare) or for organizations with 51 or more employees. Why 51? That magic number comes courtesy of HIPAA, whose regulations-aside from its more famous confidentiality provisions-prevent insurers from denying coverage to those organizations with 2 to 50 employees but offer no protection outside that range. (HIPAA, in case you had forgotten, stands for Health Insurance Portability and Accountability Act.) That translates into hundreds of thousands of self-employed home care aides who can’t get health insurance and a significant number of companies with more than 50 employees who can be denied coverage if insurers define them as “high risk.”
What constitutes high risk? That, too, has special relevance to long-term care. High risk, in part, means having a largely older workforce, high turnover rates, and exposure to hazardous work conditions (read: lifting heavy patients). Research from insurance industry representatives in Minnesota confirms that LTC workers have higher-than-average costs per hospital admission, higher-than-average number of prescriptions per year, and a higher prevalence of some expensive illnesses, such as diabetes, back problems, and high blood pressure.
Once organizations grow to more than 200 or so employees, they have an easier time at the negotiating table and can consider self-insuring, since the pool of insured people is large enough to absorb the high costs generated by the seriously ill enrollees. However, cost barriers are still huge and may result in sobering trade-offs. For example, many employers have scaled back on who gets coverage, how good the coverage is, or how much the company contributes. One in ten nursing homes and home care agencies that offer health insurance don’t pay any of their employees’ health premiums.
Even when employers do pay a portion, the employee contribution may be too much for some low-wage workers to afford. Nursing assistants, for example, typically make less than $20,000 per year. A contribution of even $100 a month can price them out of the game. Studies show that as premiums increase above 4 to 5% of family income, enrollment among low-income people falls dramatically.
Expanding Access to Coverage Anyway
Given the formidable barriers, how can employers obtain worthwhile coverage that both the company and the employee can afford? The IFAS report offers several recommendations:
- Review your eligibility requirements. High costs cause employers in many industries to restrict health insurance to those who work a certain number of hours per week, but this policy is especially hard on LTC workers, whose work hours often fluctuate from week to week. Consider setting eligibility guidelines on the number of hours worked per month instead.
Delayed eligibility-beginning coverage a few months after an employee’s start date-also affects LTC workers disproportionately because their rates of turnover are highest during the first few months of a new job. While immediate coverage is no guarantee an employee will stick around, the high costs of recruitment and retention make the idea worth trying.
- Charge less for those who make less. Erickson Retirement Communities is one example of an organization that provides discounted premium contributions for “service level” employees such as nursing assistants and housekeepers. Some organizations are using the discount concept with part-time workers, too. Cooperative Home Care Associates in New York City, for example, pays 100% of the premium cost for full-time employees and prorates that payment for part-time employees.
- Use your state Medicaid and State Children’s Health Insurance (SCHIP) Programs. One thing every facility can do, says Debra Lipson, coauthor of the report, is counsel workers regarding possible access to state programs. Given the projected increase in 2004 state tax revenues, Lipson says she sees some reason for optimism: “If states take advantage of the economic recovery to restore coverage in the next five years, a larger proportion of this workforce may be covered.”
- Partner Up. The report provides snapshots of several groups that have had remarkable success in expanding health coverage through partnerships with state authorities and other organizations. In Maine, for example, the new Dirigo Health plan will provide subsidies for low-income workers in small businesses who want to buy into employer-sponsored health plans. “The stakeholders in Maine were providers, consumers, and even a fledgling workers’ association,” says Stone. “They all worked together to make this happen.” If you’re inclined to discount the idea of working with bureaucratic and budget-conscious state governments, consider this: States have a lot to gain from such coalitions in potentially decreased Medicaid costs and healthier employer-based insurance systems.
Independent home care workers also have benefited from partnering. Counties in California and Oregon, for example, have created “public authorities” that act as an employer-of-record for self-employed home care workers and, in the process, as purchasing agents for group health insurance.
Hard Work Ahead
Despite the report’s optimism in some areas, it’s clear that the past few years have been especially challenging times for those trying to reduce the number of uninsured workers. In 2002−3, 34 states cut or changed Medicaid and SCHIP programs, resulting in 1.2 to 1.6 million low-income people losing their coverage; 35 states also froze or reduced reimbursements to providers and increased copays. Nevertheless, coalitions have continued their hard work and reaped notable successes. Living wage coalitions have won increased wages for workers under city contractors in 116 jurisdictions around the country, and some of those workers are home care employees. New studies coming out next spring will examine various models of coverage and provide even more ideas for employers. Future research will provide clearer answers to the conditions under which health benefits can be both a practical and effective tool for staff recruitment and retention.
For Stone, this means that employers should not allow today’s formidable obstacles to discourage them from acting. “It’s a moral issue,” she says. “These are the caregivers of our loved ones.”
Linda Zespy is a writer based in St. Paul, Minn. For further information on the IFAS Better Jobs Better Care program or the report, e-mail firstname.lastname@example.org. To send your comments to the author and editors, e-mail email@example.com. For reprints in quantities of 100 or more, call (866) 377-6454