March 2, 2006 – The Governor's Health Care Reform Initiative bill may not be affordable for many employers in the territory, community members said at a public meeting held Wednesday evening at Palms Court Harbourview Hotel on St. Thomas. In addition to discussing costs associated with the program, residents asked a number of questions, including why the plan is mandatory for private sector employers, how it's going to be funded, how the plan will impact the local economy, and why certain provisions have been included – or not included – in the bill.
While many of these issues have been addressed in previous meetings held to discuss the bill, new concerns about the plan also surfaced from panelists asked to speak at the meeting. Attorney Adriane J. Dudley, representing the St. Thomas-St. John Chamber of Congress, said a clause in the bill states that an employee may be terminated for not paying his or her share of the $182 monthly premium, which is split between the employer and employee.
Dudley also said the definition of "employer" included in the bill needs to be streamlined, and further expressed her concern about the premium rates currently established in the bill. "There's no way that the premium is going to remain $182, so we can't continue to keep telling people that," she said. "The rate is going to go up – it may even be higher than $182 by the time this bill is implemented."
After the meeting, Dr. Herbert Sanders, a private physician and former vice president of Prudential Insurance, said the premiums would have to increase every year to make sure local claims could be funded.
"We were told that approximately 15,000 people are going to come into this plan – with a $182 monthly premium, that means a collection of about $65 million a year," Sanders said. "During the meeting, we were also told that once those premiums are collected, and once the claims are paid, there will only be a rollover of $400,000 per month, which is supposed to act as a buffer if the money is running out. That $400,000 is nothing – premiums would have to increase."
Panelists at the meeting had similar comments. "I really expected that we would have more than that rolling over every month–$400,000 is only one major trauma, or one leg amputation, or half a premature baby," Dr. Jeffery Chase, a representative from V.I. Equicare and a local physician, said during the meeting. "I thought we would be collecting millions."
Dr. Jacqueline Hoop-Sinicrope, project manager of the initiative, said that reinsurance would kick in at a certain point if the funding gets low. "We do have a reinsurer – we would be crazy to go into this without one – so, we do have stop-loss and aggregate insurance," she said.
While Dudley mentioned that the reinsurance contract was not signed when the initial bill was drafted, others at the meeting also wondered why companies and individuals have been hired to administer the plan before the bill has been signed into law. Hoop-Sinicrope did not address this concern, however.
While the bill has been redrafted since it was introduced in the Senate last month, Dr. Anne Treasure, a gynecologist from St. Croix, said the changes "do not go far enough." Treasure said the bill does not reach enough people in the community and forces residents into a "giant monopoly, which they can't back out of if the coverage is bad." She also said that since 73 percent of the territory's uninsured are considered indigent, the plan should offer some more basic benefits – such as dental and vision care, which are currently not included in the bill.
Furthermore, Treasure said the bill does not give residents the incentive to stay on-island and receive care, instead of seeking medical attention at facilities in Puerto Rico or on the mainland. "When you're seeking in-network care on-island, the plan is supposed to pay 80 percent of the bill ," Treasure said. "However, the bill also says that a resident seeking off-island, out-of-network care only has to pay 40 percent of their bill That's not enough of a difference, especially when the bill is supposed to be helping our hospitals out of debt."
After the meeting, Hoop-Sinicrope and Lauritz Mills, principal investigator for the initiative, said many of the panelists' claims were untrue. "That thing about the employees being terminated if they don't pay their premiums – that's not part of the bill," Mills said. "I don't know where some of these remarks are even coming from. And there have been a lot of disparaging comments made about the bill on the radio and in the community, but it seems that many people have not even looked at the bill, or understand what it's about."
On the topic of premiums, Hoop-Sinicrope said she does expect rates may increase once the plan is implemented. "It's like any insurance plan – the rates will go up. However, let's say the rates go up 10 percent. That's only 18 dollars, which raises an employee's or employer's monthly premium to $100. That's still significantly lower than other insurance plans."
Hoop-Sinicrope further stated that the Premium Assistance Program included in the bill – which states that the government would kick in one-third of the premium costs for residents if they are unable to pay – has been altered to reflect the number of families in the territory living at the federal poverty level. "So, if an employee covered under the program makes less than $24,500 per year, then he or she could apply for the Premium Assistance Program," Hoop-Sinicrope said. "Then the employer would have to pay approximately $60.67 per month, and the employee would also have to pay $60.67 per month."
She added that further incentives might be included in the bill to persuade employers to provide insurance for their employees. "However, the problem we're trying to work through right now is that it's difficult to provide tax benefits to employers – most of the money from gross receipts taxes are obligated to paying back bond issues, while income taxes are obligated for the budget. But, we will continue to work on something to make the plan more affordable for those businesses who are on the margin."
During the meeting, many panelists did agree that the plan would present a more affordable health care alternative for the territory, and that the new bill did address many concerns discussed at prior meetings. However, Dudley told those attending Wednesday's event that "we need to take a good long look at something that's going to affect us for a good long time, and continue to fix the bill until it reflects the interest of everyone at the table."
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