Healthy Spending
It seems you can’t turn around these days without hearing people moan about the high cost of health insurance. Whether it’s presidential candidates duking it out in television commercials, small business owners worried about paying for insurance, or average Americans buried by the cost of prescription drugs, paying for health care is on everybody’s mind.
The moaning is not without good reason, particularly for very small businesses, which often include those in the indie community. According to a Kaiser Family Foundation survey, the smaller the business the larger the increase in premiums. While companies with over 200 workers saw a 13.2 percent premium increase last year, smaller companies saw premiums rise 15.5 percent, and individuals buying health insurance on the open market saw the largest increase.
With health insurance on everyone’s list of top public policy issues in the upcoming election, solutions are a dime a dozen. Republicans are proposing solutions that would allow more self-employed individuals and small businesses to afford health insurance, and Democrats want to overhaul the system from the top down. But how is the health care crisis affecting members of the independent film community, and what can you do to get beyond the rhetoric and figure out what option is best for you?
First, a little background. While health care is being talked about as an issue for the federal government this year, it’s actually more complicated than that. The federal government may provide the resources, but most health care regulation and program design happens at the state level. So coverage and cost can vary widely from state to state. Not good for nomadic filmmakers and video producers.
There are three major factors that come into health care policy: what is covered, who pays for insurance, and the cost of services. There’s currently wide variation in what must be covered. In many states, legislators have implemented "community rating," which requires that insurance companies must cover everyone—and every health ailment. They’re not allowed to "cherry pick" healthy people with few illnesses. In other states, mental health coverage or chiropractic services are required for all health insurance policies. (Which of course makes premiums go up.)
As far as who has to pay for insurance, employers and employees are constantly juggling the costs associated with health care: sharing premium costs, co-payments and deductibles. But chances are that if you get a break in one area, you’ll be paying through the nose in another. In some states, Medicaid has been expanded to cover lower income workers and particularly their children, which is casting state government in the role of insurer.
The final issue is the cost of health care. You’d have to be Rip Van Winkle not to know that prescription drug costs have risen dramatically in recent years, as have fees for services. Looking at those three factors together, it’s clear that things aren’t going to get better unless there’s real change in the system.
Most members of the independent film community fall into one of two categories: union workers who are members of organizations such as SAG, the Director’s Guild, or IATSE; and self-employed individuals working on contract or project-to-project who can purchase insurance through professional associations. Let’s look at union members first. Historically, unions have been able to negotiate good health insurance rates for their members because they represent a large number of people. Because of their strength in numbers, they engage in collective bargaining that forces production companies to purchase good quality health care for workers.
One of the most successful at negotiating good coverage and good rates has been the IATSE’s Motion Picture Pension and Health Plan, which covers union members that are generally cinematographers, grips, food service, truck drivers, etc. Workers must put in a minimum number of hours on an approved union shoot to qualify and must continue to work a minimum number of hours every six months. Tom Zimmerman, director of the MPPHP said that IATSE has been able to negotiate for excellent coverage that includes low co-payments and does not require the participant to pay part of the premium. The MPPHP represents 40,000 active individuals, 10,000 retirees, and another 50,000 family members.
But even Zimmerman has real concerns whether the good coverage will continue. He worries about the high cost of health care and notes that other industry unions (SAG, Director’s Guild, etc.) have not been so fortunate at the bargaining table. "It’s getting more and more expensive to provide benefits to members," said Pamm Fair, deputy national executive director of SAG. SAG recently had to introduce a premium—it’s only $600 a year, but it’s still a sign of the times."
For the self-employed, the choice is often between no health care and health care you can’t afford. Increasingly, self-employed film and video producers are joining professional associations such as AIVF and the Freelancers Union that are able to provide discounted rates. In limited numbers of states, associations have been allowed to create their own self-insurance programs further reducing premium costs. Even with these discounts, though, premiums are rising dramatically and now start in excess of $280 per month per person—beyond the resources of many in the independent community.
Priscilla Grim, who is the membership director for AIVF, said that her association has seen a steady increase in the number of freelancers looking for health care through her organization. Stephanie Buchanan from the Freelancers Union has seen a 300% increase in membership in the last year alone.
For those in the self-employed category, there was some good news this year. Starting with fiscal year 2003, health care insurance premiums are 100 percent deductible for self-employed individuals. Last year, premiums were only seventy percent deductible, so this represents a real helping hand for many in the independent community. Deductions are nice, but you still need the money up front to pay for the premiums.
The Bush Administration has continued to focus on allowing self-employed people to get health insurance. The administration will put in place a combination of new tax credits for people who buy insurance and a reduction of onerous state regulations that apply to associations who want to provide their own self insurance plans. This approach is endorsed by a large number of small business groups, including the National Association of the Self Employed. Concern, however, has been raised over the lack of regulation and the possible instability of these self-insurance programs, particularly since some of them are allowed to maintain much lower cash reserves than standard insurance companies. If there was a public health crisis or a sudden spike in health care costs, the insurance companies could go bust, leaving association members with no coverage at all.
Likely Democratic Presidential nominee John Kerry’s approach is much more comprehensive and, potentially, expensive at least in the short run. Kerry wants government to take on the role of insurer, to cover all children in America and give Americans the opportunity to buy into the same health care plan to which the President and Members of Congress subscribe.
Neither approach addresses the real problem: The US Government has refused to set up structures in order to negotiate for lower prices for health services for all Americans. For independent filmmakers, as the cost for insurance continues to rise, the pressure goes up to be part of a union shoot or get a non-film job that provides health insurance. It’s just going to get more expensive to stay independent.