No pain, no gain, no health plan
Posted on Monday, March 24, 2008
URL: http://www.nwanews.com/adg/Style/220777/
Two months ago, personal trainer Mike Wessel decided to take his chances without health insurance.
He had been paying around $ 200 a month for a catastrophic health policy. But when he developed a bacterial infection in his leg, the policy didn’t cover his $ 3, 000 in medical bills, because each bill individually came to less than his $ 1, 000 deductible.
He paid his bills out of pocket and then canceled his plan.
“Health insurance is so expensive, and they absolutely do nothing for you anyway, that it wouldn’t have panned out for me to pay health insurance for years, to have them pay $ 3, 000, which they weren’t going to pay anyway,” he said. “It makes me mad that people can take advantage of you, take your money and not pay what they said they’d pay, so that’s why I think health insurance is the biggest rip-off I’ve ever seen in my life. I really hate it.”
The plan Wessel briefly had is known in the insurance industry as catastrophic coverage, meaning a plan that charges the smallest premiums possible matched with high deductibles, useful only in the case of severe injury or health problems requiring very expensive treatment. He’d searched for the cheapest plan possible, which meant that he’d be paying for any minor injuries or illnesses himself.
He said that he found that paying as much as a few hundred dollars a month would cover him more completely, but he refuses to pay so much to cover one person.
“If I had paid for health insurance these past 10 years, from when my mom’s insurance from college stopped paying until now, I would have wasted thousands and thousands of dollars because I don’t use it,” Wessel said. “Now, if I was a sick person, or if I was prone to leg breaks — I’ve never broken any bones in my body — it would have been worth it.”
As a self-employed trainer, Wessel works for his clients, not for JP Fitness, the Little Rock gym where he meets with his clients. In fact, personal training is the 30-year-old’s second job — he is also a professional cage fighter. But because of his independent status, he has no formal employer at either job, so he doesn’t receive benefits like health insurance.
Personal trainers and group fitness instructors often work part time at multiple gyms, not accumulating enough hours at any one gym to qualify for benefits.
The high cost of individual health-insurance plans often puts fitness instructors and trainers among the 47 million Americans, or 15. 8 percent, who lacked health insurance in 2006, the most recent year for which the U. S. Census Bureau provides data. That year, 59. 7 percent of Americans who had insurance were covered through their employers.
In Arkansas, the percentage is greater. Between 2004 and 2006, an average of 482, 000 Arkansans, or 17. 5 percent, lacked health insurance, making the state one of 15 with an uninsured rate higher than the national rate.
Many people without access to health insurance through their own workplace can depend on a spouse’s plan to cover them. Wessel’s co-worker Kim Parks usually teaches five classes a week at JP Fitness, which she estimates at about 30 work hours a week. That makes her a part-time employee. She said she has never considered how she’d get health insurance on her own, because she hasn’t had to. Her husband’s health plan has always covered her.
It’s the unmarried fitness instructors and personal trainers who tend to fall through the insurance net.
OPTIONS EXIST There is an insurance plan out there for everyone, according to Max Heuer, spokesman for Arkansas Blue Cross Blue Shield, who said it’s a risk to go without insurance. “What we try to do is offer various deductibles, various options for people to fit their needs,” she said. “It’s really a matter of what best suits your financial situation, your health situation, what you may or may not want coverage for. I think that young people especially who find themselves all of the sudden in a situation where they may have some high medical bills are very glad they have insurance. “ I think part of the problem that’s obviously been true about the industry is most people have no idea about the true costs of medical care. As more and more information is beginning to be available to consumers about the true costs of medical care, whether it be a doctor’s visit or hospital care, they see the value of insurance.”
Regions Insurance Group compares multiple carriers’ rates to find the most affordable plans for its clients.
“Typically, if an individual comes to us, we try to ascertain a little bit as to what their needs are and what health conditions they may have so that we can give them a good idea of what they can expect by going through medical underwriting in the individual market,” said Tom Hayes, vice president and manager for employee benefits.
“We’ll take an application and then submit that to one, two or three carriers and see what rates we get back from there. For somebody in their 20 s to 30 s, you’re probably looking at an individual premium based on a deductible anywhere between $ 80 and $ 150 a month.”
Hayes estimated that 3 percent of his company’s health-insurance clients hold individual policies.
“If I have a group client, that’s one policy, but there may be 1, 000 people on that group plan, so we may have 50, 000 people covered under group plans, but we probably have 600 to 800 individual health policies,” he explained. “We have a crosssection of all the employers in Arkansas because we have gigantic groups all the way down to two-employee groups. We probably write four to eight individual medical policies a week and write four groups a month, but those groups might [each ] get us 500 employees.”
Health savings accounts, signed into law by President Bush in 2003 to help individuals save for health care, are popular with individual policyholders, especially healthy, single young professionals, Hayes said.
These health plans have high deductibles coupled with taxdeductible contributions to a savings account used to finance health costs as needed.
“What you don’t use rolls over to the next year, and ideally, you continue to build an account, especially if you’re healthy, over a number of years, and you end up with a 100 percent paid-up health plan because you end up with more in your account than you have in your deductible,” Hayes explained. “At [age ] 65, they can take out those dollars just like an IRA [Individual Retirement Account ] and pay ordinary income tax rates. But at 65, too, those HSA funds can be used to purchase long-termcare insurance tax-free and also pay for Medicare premiums taxfree.”
RISKY BUSINESS In the case of personal trainers and fitness instructors, in addition to the health fears like illnesses and accidents everyone faces, the constant workouts can be tough on the body and there is always the risk of injury while exercising. Cabot personal trainer Patty Groth, 52, said she relies on prayer, exercise and a nutritious diet to stay healthy. “When you’re a self-employed personal trainer, it’s very hard to get really good insurance,” she said. “Since I am single, I have a house payment, house insurance, car payment, car insurance, and then the utilities, and from day to day, sometimes I get a little bit worried, but you kind of say prayers and say, ‘God’s going to take care of you,’ and you do what you can.
“ Basically, every day I eat really healthy and I try to get enough rest.”
She has minimal insurance to cover major health issues, but does her best to take care of herself so she can avoid medical visits. She admits to not visiting the doctor sometimes when she’s sick because she doesn’t want to pay the co-pay.
Before Groth became a fulltime personal trainer, she was fortunate to have health insurance through her previous employer, the Timex Corp. in Little Rock. While working there almost 15 years ago, she was diagnosed with breast cancer. Group insurance covered most of her treatment.
“That’s another reason why insurance was very hard for me to get [as a trainer ],” she said. “Because of that [history of cancer ], nobody wants to insure you.”
Unlike group insurance plans, under which no employee can be denied coverage, the companies that provide individual health-insurance plans can legally decline potential clients based on their health conditions and medical histories, Hayes said.
“If that occurs, then we have to look outside the individual market and go to the state individual health plan,” he said.
The state established the CHIP — Comprehensive Health Insurance Pool — program in 1995 as an alternative for Arkansas residents deemed uninsurable because of the high risk nature of their health. Calendaryear deductibles under CHIP range from $ 1, 000 to $ 10, 000.
HARD LUCK Groth and Wessel say they frequently receive insurance solicitations in the mail, but have no interest in signing up because, to Groth, it’s unaffordable, and to Wessel, it’s just not worth the expense. Groth also contracted a severe bacterial infection, methicillin-resistant staphylococcus aureus, or MRSA, two years ago. Her five-day hospital stay cost more than $ 5, 000, which her insurance didn’t cover. She worked out a monthly payment plan with the hospital in which her bill, including interest, is $ 75 a month. She said sometimes it seems like she’ll never pay it off. Because of her limited insurance, she tries not to exert herself athletically as much as she might if she weren’t so worried about health-care costs. “One of my passions is trail running, and a lot of people will tell me, ‘You could be winning these races, ’” she said. “Usually how I approach that is that’s my fun fitness, and I use it to relax. If I really pushed to the limit, I could end up getting injured, and I know that will sacrifice my job.” If trainers get hurt at work, their recourse is workers’ compensation. “All companies are required to carry workers’ compensation coverage which protects [employees ] from on-the-job injuries,” Hayes said. But if they get hurt on their own time, they’re left to their savings, Wessel said. And along with having to cover potentially high medical bills without any assistance, they lose paid workdays, too. Independent contractors can’t depend on a cushion of sick or vacation days.
PART-TIME JOBS The situation is different for staff members at large health clubs that require employees to restrict their services to that one club.
“We don’t have the [health insurance ] problem in that if somebody works here for us, they work here for us [only ],” said Bob Shoulders, who with his wife owns and manages the Fayetteville Athletic Club. “We have exclusivity with our trainers and our group-exercise people. We invest the money in training and certification and spend time and effort recruiting clients and filling up classes for those folks, so we don’t want them going out to a competitor’s facility.
“ The big reputable clubs don’t have any independent contractors.”
However, employment at a single venue doesn’t necessarily translate to full-time status and benefits. Shoulders’ club, for instance, provides health insurance to employees who work at least 30 hours a week. The same minimum applies to employees at Little Rock Athletic Club, but according to Lisa Cooper, the club’s fitness director, most of the 40 instructors are not considered full time because they only teach two to six classes per week.
“This is a very part-time job, to be a group-exercise instructor,” Cooper said. “They couldn’t support themselves on three classes a week. They’d have to have a full-time job [elsewhere ], and I do have some stay-at-home moms who are married, and they teach a few classes a week because they really enjoy it.”
Mary Olson, day manager at Little Rock Athletic Club and previously the club’s insurance administrator, said several personal trainers there meet the full-time time requirement, but few aerobics instructors do. Those who don’t have insurance through their spouses are still young enough to be covered on a parent’s policy or they have individual policies.
“In this day and time, with the fee that can be related to a hospital visit or anything like that, I think most folks are very careful to actually be covered,” Olson said. “I would hate to think [the uninsured ] are out there. I guess they are, when it comes down to a budgetary decision, but I don’t know of anyone here that would fall outside of having [insurance ] available to them.”