By Bruce Shutan
Rob McCarthy, a seasoned gaffer and member of the Studio Electrical Lighting Technicians Local 728, comes from a long line of Hollywood electricians. His grandfather and father each worked as studio electricians at Universal Studios for more than 40 years; several uncles and great uncles also worked in the motion picture industry.
Grandpa’s health insurance covered house calls, though the family had to scrape together every penny to pay out-of-pocket costs related to grandma’s heart condition. Coverage improved for the next generation of McCarthys, starting with a comprehensive dental plan introduced in the early 70s. “Until then, I’m certain my father had to accept every distant location for years just to keep our teeth clean,” McCarthy quips.
His mother recently recovered from a serious pancreas ailment that cost less than $1,000 out of pocket after Medicare and the Motion Picture Industry Pension & Health Plans (MPIPHP) picked up most of the roughly $90,000 final tab. “Our co-payments were always minimal for eye care, dental, hospitalization, etc.,” he recalls.
Prescription drugs were also generously covered. “When I started in 1977,” McCarthy says, “we never paid a penny out of pocket for the most expensive prescriptions.”
McCarthy considers health insurance the most important benefit of his occupation and is grateful for having had access throughout his 26 years in the business to “an unbelievable health plan” with complete coverage, reasonable co-pays and an extensive list of physicians from which to choose. While he realizes prescription drug costs are rising, McCarthy believes the coverage is still superior to what most of the nation’s workforce receives.
MPIPHP participants no doubt have been largely shielded from the painful cost-sharing arrangements in place throughout much of the U.S. Now there’s an effort afoot to make them aware of their choices concerning prescription drugs.
“It’s important that we communicate to participants the cost of drugs that are in generic and brand-name categories so that they can be in a better position to ask their doctor about the differences, since they now have a financial interest in that decision,” observes MPIPHP executive administrative director Tom Zimmerman.
The crew is in “an unusual and enviable position” in that they’re spared a monthly premium contribution and are subject to modest co-pays, according to Joe Martingale, national leader for health care strategy at Watson Wyatt Worldwide in New York.
“Often people who have very generous coverage aren’t aware that the cost of their doctor visit or prescription drug are worth much more than a $5, $10 or $15 co-pay,” he explains. “And if people thought of that full amount as their own money, they’d be more prudent consumers. It’s difficult when you aren’t faced with high costs not to consider this an entitlement.”
One major problem with the current health care system is overuse, especially with risky surgical procedures that don’t always need to be performed. “It’s really in everyone’s interest that we pay close attention to ensuring we receive appropriate care,” Martingale says. “Most employers in the U.S. are facing an affordability crisis in benefits, particularly for health care whose costs have risen far beyond the rate of increase for other costs.”
Of course, some medical procedures simply are not covered and all health plans are not created equal. It’s a scenario all too familiar to Harri James, an actress turned script supervisor who has written and directed a feature-length film and four award-winning shorts.
When James was treated for infertility in recent years, she paid out of pocket for each procedure (sometimes more than $10,000 at a time). She’d submit the claim to MPIPHP, her primary source of coverage, then, following routine claim denials, send the paperwork over to her secondary plan through the Directors Guild of America.
The wait for reimbursement proved stressful. “This procedure tied up our savings for months at a time and slowed our treatment process when we had no time to waste,” James explains. “I decided I’d be better off waiving my eligibility and canceling my MPIPHP insurance so that the DGA would be my primary. Infertility is hard enough to deal with without your insurance plan creating unnecessary obstacles.”
Annual out-of-pocket health-care costs for working Americans have risen on average to $2,182—a 26% increase between 1995 and 2001, according to the U.S. Bureau of Labor Statistics. The Kaiser Family Foundation, a nonpartisan research group that tracks health-care spending, notes that the average monthly worker contribution to premiums for family coverage alone more than tripled to $174 from $52 between 1998 and 2002.
But employers also are paying twice as much in health-care costs than they did six years ago—with 2004 marking the fifth consecutive year of double-digit increases in their medical benefits tab, according to James Foreman, a managing director of Towers Perrin.
Reality TV dilemma
Ken Bornstein, A.C.E., a 25-year veteran editor, recently faced a dilemma. His MPIPHP health insurance coverage lapsed Oct. 1 because he didn’t work enough hours to continue his eligibility through the Motion Picture Editors Guild Local 700. The only work opportunities available to him during the past few years have been in reality television, whose genre churns out largely non-union shows. Bornstein has worked as an offline editor on Spy TV, The Bachelorette, The Jamie Kennedy Experiment and Are You Hot?
His sole coverage now is with a Blue Cross of California policy on which his wife, Cori Solomon, is listed as the main subscriber. For several years, the couple’s more generous Blues plan was a primary source of coverage, with MPIPHP serving a secondary role because Solomon has a pre-existing condition that requires ongoing medical treatment. Based on their ages, the couple pays $896 a month for a Cadillac-style preferred provider organization plan whose $5 million maximum lifetime benefit is higher than the $2 million for actives and $2 million for retirees covered under MPIPHP.
“The way we look at it is we have to have good insurance,” says Solomon. “If you have a major hospitalization for cancer or any other serious condition, you’re going to run up the bills real quickly and eat up most of your benefits.”
Bornstein still pays more than $800 in annual dues to Local 700 but without the benefit of health insurance coverage—a membership arrangement he views as an unfair value. “It’s totally contingent upon whether you’re working for a union signatory company that pays into the plan,” he says.
Trouble is, below-the-line talent occasionally may be forced to accept non-union employment in a difficult business climate and those hours are not credited toward the plan’s eligibility requirement.
“You need to take whatever work you can get,” observes Bornstein, whose job security also faces a competitive threat from younger people who are willing to work for lower wages.
Under the latest collective bargaining agreement involving MPIPHP participants, working spouses who have access to their own employer’s health insurance must now choose that coverage as their primary plan. But benefits-eligibility rules for the crew have remained unchanged at a time when most plans have been tightening their terms to qualify for coverage.
“That’s a huge point,” Zimmerman says. One significant change for the better made several years ago is the ability on a rolling six-month measurement to qualify for health coverage. “You now have 12 opportunities compared with two chances in 1999,” he reports.
Despite their health care challenges, Bornstein and Solomon appreciate their standing within a much larger context. “We feel very fortunate to be able to afford our own plan, and a good one at that, while many Americans don’t have anything,” explains Bornstein.
But he’s adamant about the need to provide a much better safety net for the nation’s uninsured. “Obviously it’s going to cost a lot of money in taxes,” he says.
Adds Solomon: When the uninsured seek treatment in a hospital emergency room, “we’re all paying for it one way or another.”
Below the Line writer Bruce Shutan has been covering the employee benefits industry for 15 years. Mark London Williams, who writes the page 2 Union Roundup column for Below the Line, contributed to this report.