The Health Insurance Problem

By: Toni Sandell

By now, everyone who is affected knows that Tower Health Insurance has been taken over by the State of California and is out of business.

This event was a surprise to everyone involved. Last year, Tower did a very good job of providing health insurance coverage at a reasonable price. Even more people signed up for Tower this year and, as a result, about 700 employees of CNUSD were suddenly faced with losing their health insurance coverage.

The story broke around mid-September. There was news that Tower was in some financial trouble but, since this has happened to other insurance companies, there was an expectation that Tower would either pull itself together or at least hang on long enough, with or without State help, for us to complete the contract year.

Around the first of October, we suddenly discovered that the State had taken over Tower and was telling all the insured parties that as of October 10, Tower would be out of business.

It is difficult to find reasonably priced health insurance in today’s insurance marketplace when there is no crisis...it is incredibly difficult to do so on such short notice. There was also the complication that many insured were "off track" and might come back from a vacation to find they had no insurance coverage at all. The decision was made to do a "tape to tape" transfer that would move all Tower clients, en masse, to whatever new company was chosen. Although there were some negatives attached to this decision, the fact that no one would be left without health insurance coverage was the deciding factor.

Yes, Blue Shield is more expensive than Tower. Yes, some members may find that their particular doctor does not accept Blue Shield (although that would be unusual.) Yes, there will be some adjustments forced on a few people. No, this is not the best of all possible worlds.

CNTA will be meeting with the District to discuss ideas about health insurance coverage that might avoid such problems in the future. We will be discussing the possibility of joining an insurance trust because the large number of people in a trust may make coverage more affordable. We will be looking at any and all ways to protect our members from a similar event in the future.

What CNTA cannot do is change the climate of the insurance marketplace. Insurance companies are merging. As they do so, choices shrink. Competition decreases and there is less leverage to keep prices down. Prescription drug costs are soaring and insurance companies are either restricting expensive drugs or demanding higher premiums and/or co-pays. We will be having extensive discussions with members about their needs and concerns before we make any significant decisions.

You can help in this process by becoming educated. Read about health insurance and the factors that go into deciding premium pricing. Decide what aspects of health insurance are most important to you. Would you trade higher co-pays for lower premiums? Is a particular hospital a priority for you? Would you accept fewer insurance choices (even if you do not like a particular plan) if the premiums are kept at a reasonable level? Is a higher insurance benefit more important to you than a higher salary? While it is impossible to meet everyone’s needs, we will endeavor to meet as many needs as possible.