Health Care Reform

Nov. 5, 2009

Transcript:

José Cárdenas: As the cost the healthcare rises, many feel those increases in their pockets and small business is wrestling whether or not to continue to offer the benefit. We'll hear from an organization promoting the success of small businesses. But first, how they're dealing with rising healthcare costs.

>> The rising cost of healthcare insurance hits the wallets of many people. Including business owners who make health insurance available to their employees.

Howard Stuart: Our insurance rates since I took over in the year 2000, have increased 11% per year on average.

>> He runs AGM container controls, a Tucson-based company that manufactures items for the military and lifts for the handicapped.

Howard Stuart: Our insurance rates have increased an average of 11%. I find that pretty interesting because my wages and salaries for our company have probably increased at the rate of 3.5-4% during that same period.

>> AGM has 104 employee, all of whom are eligible for the company health plan. That includes families and brings about a predicament.

Howard Stuart: The nicer I make my benefit, the more likely that the spouses of my employees are going to insure through me instead of through their -- through the business that they're a part of or the organization they're a part of. So I began to realize I couldn't give the best insurance benefit without paying that price of getting everybody's family members on my policy. So what we've ended up doing is we've tried to come up with policy amounts that -- in terms of personals, that help the employee, but will not attract the employee's spouse to come on to our plan.

>> On the other side of Tucson is net trio and computer bits. With 45 employees. The company has always paid 100% of the health insurance costs for those who work there. But this year, premiums went up by 13%.

Cristie Street: We took a look and analyzed the numbers and for us, the difference in premium ended up being essentially the total of a head count. So it was more than $24,000. In the first year. And we saw that going up in the future.

>> The rate increase put the company at a crossroads when it comes to health insurance. Some managers turns to employees with the options.

Cristie Street: Do we continue to offer 100% paid for in health insurance for the employees, do we cut back on the type plan or change it and try to lower our company premiums but then push the burden of the cost of healthcare more on the employees, or do we raise our rates? Pass through those charges to our customers? And because we're a business-to-business organization, we felt like that was probably the least possible option in the current economy.

>> The other option was to fire someone, so they could continue to offer the rest of the company the same benefit plan. The manager said that really wasn't doing in their minds, so in the end, after talking with employees, they reduced the plan's coverage. Though the company still pays for everyone.

Cristie Street: We ratcheted it down so that the base plan is a little lesser. It's an 80/20 plan, a little bit higher out of pocket maximum for the staff and there's the option to upgrade. So the employees, if they want it actually go back to the Cadillac plan can pay the difference. But I'll pay for the base plan, 100% of the cost.

>> You may ask, why if prices are climbing, do small businesses continue to offer health insurance?

Howard Stuart: It helps you to attract and retain employees. So chances are, the companies that are not providing insurance, the quality of employee they can attract and retain is going to be lower than what I can do -- you know, with my company.

>> And the economics of healthcare is important to more than just the bottom line of the companies involved.

Cristie Street: What I'm trying to avoid as far as to have to make the decision between taking care of a health issue, and -- and, you know, putting groceries on the table or putting their shoes on their children for school. Any time that staff have to have that kind of conversation with their family or, you know, in their own head, affects work, whether it's directly or not. It definitely carries over into their performance every day. And translates into longer sick days because they've perpetuated a problem that probably could have been nipped in the bud.

>> When both companies were faced with increases rates, they shopped around and were able to bring the costs into line with what they can afford -- this year.

José Cárdenas: Joining me to talk about small businesses and healthcare reform is Armando Contreras, president and CEO of the Arizona Hispanic chamber of commerce. Welcome to "Horizonte."

Armando Contreras: Thank you.

José Cárdenas: The chamber is not new to our show. Periodically we've had representative, including your predecessor to talk about what's going on. Before we delve into the healthcare issue, give us an update on what's going on at the chamber.

Armando Contreras: Thank you for having me on the show. I've been with the chamber five months, and my priority coming into the chamber was to build internal capacity and make sure we have the tools and the resources to better serve our membership. Second, I started looking at the programs and services that we offer our members and I'm enhancing that at this point. We're looking to bring in an empowerment series for small businesses, we're going to be partnering with ASU, university of Phoenix, Phoenix college, in order to provide services and resources and workshops, credit and non-credit sessions for our small business members, both English and in Spanish.

José Cárdenas: Has the turndown in the economy affected the membership levels in the organization?

Armando Contreras: I think somewhat. It has been a challenge for us, regarding retention. But at the same time, I think it's timely that members and new members begin to join the chamber because we want to be that resource for sustainability. So during these economic times, that they come to the Arizona Hispanic chamber of commerce to look for those tools and look for those resources that are going to help them sustain during these times of economic downturn.

José Cárdenas: The video package we saw focused on small businesses generally. Are the members of the Arizona Hispanic chamber facing those same issues in terms of affordability of healthcare insurance?

Armando Contreras: I think it's always been an issue. The same with Latino businesses. There's not a kinds of there. What we do know is that of the ethnic groups in nationwide, Latinos are the one that have a higher percentage of those who are not insured. So definitely it's of concern to the chamber.

José Cárdenas: What's the size -- I should have asked you this before. The Hispanic community as far as the small business community at large?

Armando Contreras: The Hispanic business community here in Arizona, the small businesses is about 35,000. As a whole, small businesses in Arizona are approximately about 400,000. In Arizona -- I'm sorry, in Phoenix, you have about 9,000 Hispanic businesses.

José Cárdenas: And with respect to the benefits in the chamber as it relates to health insurance, there are plans that your members have available because of their membership, right?

Armando Contreras: We do. If you become a member of the chamber, we are partnering with HUMANA. They provide a discount. We are also looking into providing several other insurance options for our members. So we will be in conversation with HUMANA and others to provide a comprehensive package for our members.

José Cárdenas: Let's talk about healthcare reform. Positions that either your chamber or the Hispanic Chamber of Commerce has taken with respect to what's going on.

Armando Contreras: Specifically with our chamber, we're for healthcare reform. Definitely there has to be affordability. For our members. They, too, are beginning to make choices that are very difficult for the businesses, either not offering healthcare insurance for their employees, not offering, maybe healthcare for themselves. As maybe a mom and pop shop. Obviously, there's a danger in that. There are healthcare risk the involved. Especially with children. Today with the H1N1 flu virus. There's definitely a concern. If they're not -- if though don't get the proper medical care, that could also spread. The pandemic can become much bigger. Maybe exponentially as it is today.

José Cárdenas: What do you see as the principle component of healthcare reform? What has to happen to make Hispanic businesses more successful in this regard?

Armando Contreras: I think access to affordable healthcare. It has to be affordable. That's number one of number two, with the United States himself chamber of commerce is looking at is more of an inclusivity. To be part of the healthcare reform package.

José Cárdenas: You're talking about not only people that have legal residence status, but people who are undocumented, am I right?

Armando Contreras: Those that are undocumented, be it one agrees or not agrees that they're here legally, there is a healthcare risk for them. If they don't get the proper care. And that affects not only the immigrant community but all communities above and beyond the Hispanic community. So we should look at solutions to find a way to also care for the non-citizens.

José Cárdenas: So in this regard, though, the chambers would find themselves at odds with the Obama administration which has repeatedly emphasized their proposals will not provide healthcare benefits to those here illegally.

Armando Contreras: According to the white paper presented by the Hispanic Chamber of Commerce, I believe that would be true. In regard to the Hispanic -- the Arizona Hispanic chamber of commerce, we're looking for solutions for our members and having a comprehensive healthcare package for them where they can access affordable healthcare, that would be a priority for us here in Arizona.

José Cárdenas: And is it a priority because as you indicated, it makes sense for everybody's well-being that you have children, whether their status is here as a legal resident or not, to be vaccinated and have healthy people not spreading diseases or stuff like that, but what about the -- that we shouldn't provide benefits to people who are not here legally?

Armando Contreras: If we begin to do that, we're all at risk because the people that are here, either legal or non-legal, they -- their children still go to the schools. Their workers still go to businesses, be it Hispanic or not Hispanic businesses.

José Cárdenas: So it's something we need to do for everyone's benefit.

Armando Contreras: Absolutely.

José Cárdenas: On that note, we have to end our interview. But Armando, thank you for joining us and best wishes for your new position.

Armando Contreras: Thank you, it's been a pleasure.