The costs of good health

| February 03, 2008

Dr. Ronald Rush examines driver Heath Hudlow of Jasper, Ga., at Highway Health Care in Texarkana, Texas.

When it comes to health insurance, the dream of self-employment – owner-operator aspiration among truckers – isn’t always what it’s cracked up to be.

Truckers News’ Fit for the Road program participant John Shook, as an owner-operator leased to Landstar, had what he calls “just-in-case insurance.” Shook’s wife, Jennifer, was self-employed as a mental health therapist at the time and in the same boat he was – having to shop on the individual policy market. Getting covered under her plan wasn’t an option for Shook. The couple’s high-deductible plan, he says, only helped with major expenses, though they paid $526 a month for the coverage. When they purchased the plan, long before John’s participation in the Fit for the Road program, his blood pressure was high and he was 50 pounds heavier. They’d both already been turned down for a family policy by Blue Cross Blue Shield due to pre-existing conditions. They were taking what they could get.

Such is the case for legions of Americans – in past years, as health-care costs have risen dramatically and employers, looking to cut their own costs, have increasingly made group plans optional with at least partly employee-paid premiums, costs for insurance have risen accordingly. The fewer members in any group plan, the higher the individual risk and thus the higher the cost. Optional coverage, furthermore, tends to be selected by only the most needy – read: unhealthy – individuals, and in a sort of self-fulfilling prophecy, rates rise. A profusion of large claims, combined risk spread ever thinner, drives up plan costs over time.

Today, an average company driver family plan takes $65 from every weekly check, or $260 monthly, according to National Transportation Institute data, up 3 percent from the preceding year. For individuals the numbers are better, but the rate at which they’re rising is higher.

The burden on the self-employed is perhaps the greatest. Trucking companies that both employ drivers and utilize owner-operators as independent contractors can allow contractors to buy into company-administered group plans, but the companies can’t contribute to the contractor’s membership. Rates can be as high as $1,000 a month for a comprehensive family medical plan under this arrangement, which sends many owner-operators into the individual policy market for a cheaper, limited benefit plan. There, as evidenced by the Shooks’ difficulties, often only those in good health are even eligible for something other than catastrophe insurance.

When Pennsylvania-based Joe Cummings transitioned out of an operations position at TMH Associates to go out on his own with truck and trailer in regional hauling, he elected to pay for COBRA continuation. The government program allows employees to remain covered under their old employer’s plan after employment status changes – at their own expense. Cummings paid a $340 monthly premium for the privilege.

But COBRA eligibility is temporary (18 months; 36 months for dependents in certain situations). With his wife working as a full-time waitress without company benefits, Cummings found himself calling insurance companies this past October. “I know I’m not thin,” says the 46-year-old. “At 6’3″, 260 pounds, I’m a big guy.” Not just big, according to the number crunchers at one provider – a body mass index of 32.5 qualifies Cummings in the eyes of the medical establishment as obese. The insurance company denied him coverage.

The potential for saving on insurance by reducing his own health risk was part of what motivated Shook to succeed in losing weight in the Fit for the Road program. But he managed only to slow the bleeding, so to speak. Well into the yearlong program, with his blood pressure back to normal levels and his weight greatly reduced, his insurance company informed him that “the cost of insurance had gone up,” he says. His rates, therefore, would remain the same.

Shook’s now a company driver covered under East St. Louis, Ill.-based Beelman Transportation’s group health plan at a weekly cost to him of $50. His son is covered on his plan. His wife is now the manager of a team of mental-health professionals and is covered on a company plan as well.

Cummings explored a variety of solutions to his problem, chief among them a “HIPAA Conversion” from COBRA, made possible by requirements of the Health Insurance Portability and Accountability Act. It’s meant to ensure that former recipients of group coverage can buy an insurance plan roughly comparable to their COBRA plan after it runs out, despite pre-existing conditions.

“You wouldn’t believe how many phone calls I’ve made,” Cummings says of the bureaucratic nightmare of obtaining all the necessary information. “It’s taken me about a week to figure it out.” He could retain coverage for a monthly $331 with $15 copays for office visits, though the deductible offered was high.

Cummings also looked at the potential of leasing on with a carrier to take advantage of their group plan, but as of press time hadn’t made a final decision.

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