A health insurance crisis in our country? How about in our industry?!?

Health insurance, health insurance, health insur-blech.

Just thinking about the health insurance crisis in our country makes me want to throw up.  In case you need an urge to purge, here’s a quote from a NY Times editorial piece:

Health care costs are far higher in the United States than in any other advanced nation, whether measured in total dollars spent, as a percentage of the economy, or on a per capita basis.  And health care costs here have been rising significantly faster than the overall economy or personal incomes for more than 40 years, a trend that cannot continue forever.  It is the worst long-term fiscal crisis facing the nation . . .

Ok, so after I finished puking, I thought, “everyone says how expensive it is, but just how expensive is health insurance in this country?”

According to this 2008 report on employer health benefits by the Kaiser Foundation, also referenced by the National Coalition on Health Care, the average annual premium for single coverage in 2008 is $4,704.

$4,704 to cover one person per year.

Or, to break it down weekly, the average cost for an employer to provide health insurance to an employee is $90.47/week.

Yikes.

$4,704 per year.
$90.47 per week.

Steep, right?

You know what’s coming next, right?  Yep!  Let’s do what we do best and compare those figures to the costs on Broadway, shall we?

If you’re an employee working backstage on a Broadway show, then you’re part of a union (unless you’re an assistant company manager or a child wrangler or the Houdini Double in Ragtime).  If you’re in a union, you’re eligible for health insurance because your employer (The Producer) is paying a premium on your behalf.

So, how much is that Producer paying on a weekly basis for health insurance?  Here are some examples from four major unions:

Actors (AEA)$159/week or $8,268/year(76% above national average)

Company/House Managers
Press Agents (ATPAM)$175.83 or $9,143.16/year(94% above national average)

Musicians (Local 802)$218/week or $11,336/year(141% above national average)

Local Stagehands (Local 1)14.5% of gross earnings(115%/176% above national average)
$195/week or $10,140.40/year for Assts.
$250.07/week or $13,003.71/years for Heads
(Assumes NO work calls, OT, holidays, etc.)

These four unions alone charge an average of 106.5% ABOVE the national average for health insurance premiums, and that’s using the assistant rate for the stagehands, and not including any overtime, weekly maintenance, etc.  I recently asked a Company Manager of a long running musical what the average health insurance premium was for their local stagehands.  The answer?  $372/person!  (Oh, and don’t even get me started on paying a health insurance premium on a percentage and not on a flat fee.  Do you think the insurance company charges more for the policy just because the employee is working on a holiday and therefore gets paid more?  No.  And if health insurance is paid on a percentage, then when the plan gets a rate increase in a new contract year, and the wages also get increased, the plan gets a double-raise?  Color me confused).

So, if you’re like me, you’re saying, “What in the health is going on?”

Just wait.  There’s more.

If these unbelievably high premiums got all of our employees health insurance on the day they started work and they kept it for a considerable period of time, I might understand where the money was going.

But that’s not what happens.

If you’re an actor, you do not qualify for health insurance unless you work a minimum of 12 weeks in 6 months or 20 weeks in one year.

Yep, you could have worked for 11 weeks on a Broadway show, and your employer could have paid $1,749 into a health plan for you (almost 40% of the national average) and you can’t go to the doctor.

Oh, AND on top of the premiums the employee pays for you, you also have to pay $100 every quarter or an additional $400/year to keep your coverage.

So, if you’re keeping score, a Broadway actor working for one year has self and employer contributions 84% higher than the national average.

Read more about AEA’s plan here.

Musician?  They offer more immediate access to some sort of plan, but to get the best you have to work almost 20 weeks.

Read more about 802’s plan here.

And how about the richest plan out there . . . the stagehands, at a whopping 14.5% of gross wages earned. Surely they get killer coverage right?  You be the judge.

If you’re a Local 1 Stagehand, there are three tiers of heatlh insurance, and the quality of coverage depends on how much earn.  If you earn less than $35K (which is the equivalent of 26 weeks (!) at the lowest rate), you aren’t covered.  So, if you came up just short and made $34, you get nothing, despite the employer paying in $4,903.  And remember, the $35K threshold is for the lowest plan. To get the big boy plan, you have to earn $70k.

Read more about Local 1’s plan here.

Obviously this is a big problem on Broadway . . . and not specific to one union (although some are obviously more reasonable than others), so there have to be some serious underlying issues.

Some people will say, “But Ken, NY is an expensive place to get insured!  Of course it’s going to be more.”  Yes, it’s true.  NY is a more expensive place to be insured . . . but 176% more?  I don’t think so.  Take a look at this list of average health insurance premiums by state.  NY is not the most expensive and in ’07, the average premium in New York was $4,734/year.  Increasing that b
y a whopping 10% to account for inflation would put it at $5,207.40/year compared to our union figures above.  Still cheaper.

Another common argument is that because Broadway shows aren’t guaranteed lengths of employment, the unions need to charge for “portability,” or the ability of the employee to take the plan from job to job.  Ok, ok, I get it . . . but you know what?  If I were producing a big Broadway musical tomorrow, I would rather guarantee the cast and crew 6 months of health insurance or maybe even a year’s worth if I could do it on my own plan.  I bet I could save money AND give them all coverage starting almost immediately with no waiting period!

Employees win.  Employer wins.  Who loses?

Or what about this?  What about not paying for health insurance premiums at all (stay with me, now).

What about giving the employee CASH in lieu of the premium.

We could pay them a set figure – even 50% above the national average – and they could do with it as they please.  Producers would save money, they could get a plan of their choosing, and if they did it right, maybe even have a few bucks left over (I know they would if they were on my office plan, which costs me about $300 a MONTH for each of my employees, and we’re very happy with our coverage.)  I bet the Musicians would love this sort of arrangement, especially since during the last negotiation they had to give up a raise for two years of their new contract, in order to increase the premiums (yep, they gave up money to increase their premiums to 141% of the national average).

And if we paid out cash, we’d get to avoid all the red-tape and administration involved with these funds in the first place.

But maybe that’s where the problem is? Is there too much fat in these funds?  Does it cost too much to run them?  Or maybe the brokers are wise to how much money the funds have so they try and milk them?  Or more likely, is it because insuring one person is really paying for the medical issues of the others in the organization?

It’s obviously a very complicated issue, and this entry is without doubt a surface analysis, since I don’t pretend to know the internal workings of the health insurance industry.

But I do know this . . . what’s happening right now is not working for anyone.

The costs for the Employer are out of whack with what the rest of the WORLD is paying, never mind the country, and the Employees are not getting the coverage they deserve.

Maybe Obama’s health care reform will solve this issue, as I hoped for here.

But something has to be done because as that ipecac syrup of a NY Times article said, this is “a trend that cannot continue forever.”

And maybe the answer is not paying cash or having each show provide their own insurance, but the answer is certainly not building on top of the flimsy foundation of funds we have now.

We have to do what we do best.

We have to do something more . . . dramatic.

– – – – –

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Comments
  • Well, I’ll give you a comparison with another industry. I work in the aerospace industry. Each week, I pay $53.33 for my share of the medical (California Blue Cross PPO), and $9.28 for Dental (Delta Dental PPO). According to our enrollment brochure, the cost to the company (Employee+2 or more dep) is $260.39, for a total of $313.72, per week. If we were talking just one employee, that would be $23.45 employee, $114.47 company, total $137.92. It would be cheaper with CaliforniaCare (the Blue Cross HMO), totalling $97.74, or with Kaiser ($84.92). Thus, I’m thinking their average cost is low, or there are a lot of people on HMO plans such as Kaiser with rationed service, vs. the more expensive PPO plans. I can’t give NY numbers, as my company doesn’t operate in New York.

  • Brad says:

    As a member of IA, I am kindof dissapointed with the tone of this post.
    But as you are a producer, and I am a technician, I am obligated to disagree with you, I think.

  • Hey Brad,
    For the record, I’m an ATPAM member which means I’m a member of the IA as well. And I don’t think that there’s ever an obligation to think along “party” lines. We’re all in this together.
    K

  • B Teasley says:

    One error in your post – I guaranty you that the current system is working for *someone* – but that someone is not a Producer and is not an actor/musician/tech. If you could get the $ spent “out” by each union on actual health care premiums and compare that to what has been paid in by all parties, you’d likely come up with a large an interesting number as a difference.
    The Wall Street Journal did a report about a year ago. New York Workers compensation funding rates are the highest in the country. I.e., more money, higher rates, than anywhere else. BUT NY has the lowest per capita OUTFLOW of funds from the worker’s comp pool of money. Health Care and worker’s comp are related/similar. Producers/employers have to pay into it… and those that should benefit from it do not benefit from it at the level they should.
    So I suspect the current system does benefit somebody. Just not producers and not actors.

  • Wow! I felt like I was reading a “60 Minutes” exposé! Hope there isn’t some guy named Guido hanging outside your office ready to tune you up. (Or God forbid he pulls up in a gangster car hanging on the running board and asks if you’re Pat Denning then socks you in the face and Ruby Keeler has to spend a whole scene fixing your jaw!) 😉

  • Cedric Yau says:

    In the “best case,” using AEA as an example, you can work 12 weeks and get 6 months (26 weeks) of coverage. Someone has to pay the other 26-12=14 weeks of insurance. Hence the markup.
    Insurance in general is not a benefit. Most would be better off getting the cash in lieu of insurance. Catastrophic/High-Deductible Plans with $5K in reserve is a better option. And if you think $5K is a lot to “save”, consider the costs above.

  • Richard says:

    Talk about a popular post!
    I think the comment by one that s/he is obligated to be at odds with you fascinating. Unfortunately, it’s true that 95% of everything can be explained by following the money.
    People love to point at Wall Street’s greed, but greed is everywhere; they just paint it to sounds altruistic. Behind every act or word of righteousness, there’s almost always some fact of self-interest being masked.
    If the producers want to really force the issue, they should boycott producing new shows for one full season. Unfortunately, it’s the only way to get a real response. Especially in these times when work is harder to get, the unions are unlikely to be sympathetic. I hope not to get any vitriolic comments back on this post. I have little sympathy with most unions: unless you’re Italian or your grandfather, father, or uncle was in the union, good luck getting into one of the major unions.
    (And no, this is not sour grapes; I have never attempted to join any union.)

  • Maha says:

    Interesting points but i think Cash in pocket would mean I have no group bargaining power for my insurance coverage. Aea Cigna plan would cost around 800/ month purchased individually instead of through a group…. Plus my 12 weeks translates to 6 months of coverage not a corresponding 12 weeks… Also I would rather have a waiting period followed by 6 months coverage vs a few weeks here and there and switching providers an networks every time I got job. Plus the cobra subsidy would go out the window I bet…

  • Local One’s jurisdiction runs from Westchester/Putnam to Staten Island, not just Times Square. We work in a large variety of shops, studios and venues at a fairly broad spectrum of pay scales and benefit packages. As unionists, Local One is a holdover from an earlier time when workers had to join together to support each other because we only had each other. And we are quite proud of that. We are a union of workers and we all make contributions into a common pot for the common good. As such we are also able to supply benefits to the crews that work at lower rates in children’s theatres, at educational facilities, Off-Broadway venues, one-offs, hotel jobs, out-door events and all the other events that help to make NYC the live entertainment capital of the world. We do all the other events that help to create the brand of Broadway. And if we relied on the short-term employment of the vast majority of our employers in order to qualify for their/your health plan, our families would not be covered.
    As you say, we are all in this together. You should be aware that on the West Coast in some IA studio contracts, employers are making additional contributions to a separate plan along with the IA in order to lobby the government for single-payer coverage. They are thinking long term and working together for the common good. So should we on the East Coast.

  • Joel LeFevre says:

    This health insurance analysis is packed with erroneous information and incomplete statiscal presentation. You want to know what health insurance costs go here read and learn: http://www.local802afm.org/publication_entry.cfm?xEntry=97663627
    then follow that with this:
    http://www.local802afm.org/publication_entry.cfm?xEntry=46638461
    then this
    http://www.local802afm.org/publication_entry.cfm?xEntry=87334528
    So now you know that the comparative analysis offfed here is is based on insuring single individuals. Families don’t make it huh? Family coverage averages over $12,600 a year (check it on the Kaiser link provided above in the body your post). That’s 300% over the amount you claim is the national average cost of health insurance. The rest of this is then completely erroneous.
    Union Health plan financial data are part of public data freeley available to anyone willing to look. Just google “form 5500” and the name of the union. Is this blog post meant to be deliberately harmful?
    Today I took my (insured) eight year old to her first soccer practice of the springtime. A beautiful morning, sunny and just everything coming up green. One of her teammates from the fall, Emma (not her real name) wasn’t able to make it. She has leukemia and sometimes just can’t. Thankfully her parents have health insurance and with it comes hope.
    You see it’s about family and you are right, it isn’t easy.
    Joel LeFevre
    Local 802 AFM

  • Hey Joel,
    Thanks for the comment! Yes, you are right, my analysis is based on single coverage,
    because, according to my research, that is what most employers in most industries provide, and family coverage is usually supplemented by the employee (many other companies required higher employee contribution supplements for single coverage as well – see the first comment below where a member of the aerospace industry pays over $60/week).
    In fact, 802’s plan, in addition to the employer premium, also requires a supplement for family insurance in addition to the high weekly employer contributions, doesn’t it? So even if we were all in agreement that producers should provide family coverage for all employees, what about the contributions plus your premiums being over the Kaiser average for family coverage?
    Also, if we did provide “family coverage” for all, would you be a proponent of Employers getting some sort of credit for those employees without families?
    The point of this post, like all my posts, was to start a conversation and to draw attention to the fact that we have an enormous issue on Broadway and throughout our country and every industry in it concerning health insurance.
    I’m an optimist. I believe there has to be a way to get people health insurance faster while saving money at the same time. That way, more people can have the hope you describe, in terms of their insurance and their future employment.

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