What links the following headlines: the rush to file for bankruptcy before new rules set in and the deal between General Motors and its unions to reduce benefits?
Connect the dots and you get two words: healthcare costs.
Mention “healthcare reform” and many people think of the failed Clinton plan, well-meaning think tanks, or a few idealistic legislators. And if calls for reform come from an industry that has seen hard times, like the auto industry, many would say that makes sense.
But between the headlines, what is worth watching are the successful companies who are making the same demands as ordinary Americans with no access to health insurance.
Even successful companies feeling the burden
Take Exelon Corporation, for example. The Chicago-based energy giant is one of the country’s largest electric utilities, and it also operates the largest nuclear fleet in the United States.
“We are happily enjoying a period of great financial success,” said Gary Snodgrass, Executive Vice President and Chief Human Resources Officer.
However, Snodgrass and Carole Schecter, Vice President of Employee and Health Benefits for Exelon, recently discussed the steps they took to curb the 105 percent increase in health costs over the last six years.
The company had to take some unpopular steps; deductibles were raised and retirees forced to contribute to their plans. “It hasn’t gone down all that well,” Schecter conceded, “Employees asked, how can you be doing this if we’re having a great year?”
However, Snodgrass added, “Healthcare costs are like a steaming locomotive out of control…We had to pay $300 million to insure 90,000 employees, retirees and dependents last year …We are disappointed that this issue has been put on the back burner.”
Snodgrass added there is another important reason why the company has joined the National Coalition on Healthcare to push for a bipartisan, national healthcare solution.
“With us, there is this notion that we look beyond our company, we look at society, and it is a moral issue; we think it is a travesty given the vast resources of our country and our society.”
Experts say there are around 45 million uninsured Americans, and the number is expected to go up to 80 million in the next two years.
Credit counseling for medical bills?
Tell that to Gary Norgaard, a trustee at the New Jersey Bankruptcy Lawyers Foundation.
Under the new bankruptcy law, if a widow accumulates $50,000 in medical bills from her late husband’s cancer treatments, she will have to go through credit counseling to apply for debt forgiveness.
“What are they going to tell her?” Norgaard asked, “Next time don’t marry someone who is going to die of cancer if you don’t have adequate health insurance? There is absolutely no question that the absence of health insurance is a major factor in bankruptcy filings, and as healthcare costs increase it is only getting worse.”
The New Jersey Bankruptcy Lawyers Foundation has bought everything from school clothes to refrigerators for families who have seen their finances devastated by medical bills.
If the lack of a national healthcare plan is an increasing financial drain on both companies and individuals, why has healthcare reform been put “on the back burner,” as Exelon’s Gary Snodgrass said?
Costs coming home
For one thing, says Century Foundation fellow and healthcare expert Leif Wellington Haase, many middle-class Americans simply did not think a healthcare crisis applied to them.
“During the 1990’s, American employers absorbed the rising costs of healthcare. Now that the increased costs are being passed to employees and their families, it’s like the air is coming out of the balloon,” said Haase.
And as more companies decide that they simply cannot offer health insurance benefits to all their employees and dependents andstay competitive — like Wal-Mart — Haase says this could lead to a “tipping point” that will galvanize more Americans to demand that their elected officials tackle healthcare reform.
“Once Americans, especially middle-class Americans, see this as a healthcare crisis and not just a “crisis of the uninsured,” then this logical leap, if expressed politically, can make all the difference,” said Haase.
Past attempts at governmental healthcare reform, such as the Clinton plan, have left many Americans cynical about the prospect of a healthcare fix any time soon.
But Haase, author of the Century Foundation’s “A New Deal for Health: How to Cover Everyone and Get Medical Costs Under Control,” added that there are many organizations trying to bring about change. “What they lack is cohesion,” he said.
In the meantime, Exelon’s Carole Schecter said that although “it is hard to do with our election cycles, people are going to have to lead the way. Any solution is going to be difficult for somebody, but it’s such a huge economic business problem, companies cannot stand still and just wait for a national solution.”
“Our company is meeting with members of Congress, and we’re participating aggressively,” added Snodgrass. "we’re past the time to do something, in my view.”