Graphic Communicator photos by Susan Zachem

Presiding over the annual meeting are, from left, GCIU Vice Pres. Lawrence Martinez, Robert Lindgren, Los Angeles 404M employer trustee; Andrew Douglas, Philadelphia 14M trustee; and Marty Ganzglass, the fund's legal counsel. Lindgren and Douglas co-chair the fund. Martinez serves as fund secretary.

Premiums rise to worsen health care crisis

The nationwide trend in the United States of rapidly escalating health care costs and health insurance premiums impacted the Graphic Communications National Health and Welfare Fund last year.

But union and employer trustees at the annual meeting of the not-for-profit fund bounced back with new medical and prescription drug care plans to help offset costs for participating funds and employers.

Trustees approved an aggregate premium increase of 39.6 percent for the fiscal year beginning March 1, 2003. This year's premium increase was only the fourth since the fund was founded as a primarily self-insured fund in 1997.

Andrew Douglas, Philadelphia 14M co-chairman of the fund who also serves as president emeritus of the International Foundation of Employee Benefit Plans, said the health care situation coupled with poor economic performance are hitting American families and health and welfare funds hard.

High unemployment, plant shutdowns and the stock market crisis are putting pressures on working families, employers and health care funds, Douglas noted, because funds' investment incomes fell sharply while the number of uninsured Americans rose sharply.

Douglas said recent government reports estimate that more than 41 million Americans don't have health insurance, with some 1.4 million Americans joining the uninsured last year. Doctors and hospitals treating the uninsured pass on those costs to the insured.

GCIU Pres. George Tedeschi addresses GCIU and employer trustees at the annual meeting of the Graphic Communications National Health and Welfare Fund.

Douglas noted that during the debate on a national health care program initiative by the Clinton administration during the mid-1990s, health insurance premium increases moderated after rapid escalation during the 1980s.

With the threat of a national health care program gone as are the Clinton budget surpluses, "unprecedented pressures in health plans have returned with a vengeance and we're all facing it," Douglas said. "These are very trying times, not just for this national fund, but I think for all U.S. citizens regarding their health care insurance."

Also contributing to increased health care costs, Douglas said, are the "mergers and acquisitions of health care providers, which have reduced the competition." With fewer competitors, he said, providers have less incentive to negotiate discounts for preferred patient organizations (PPOs), health maintenance organizations (HMOs), and other managed care plans.

Douglas said that, during meetings to discuss the national fund with new groups, those groups cited rate increases from other insurance carriers that ranged from 30 to nearly 50 percent.

Stuart Wohl of The Segal Company, the fund's consultant group, agreed. "Everybody is seeing this. Whether in a traditional plan, a PPO plan, or an HMO plan, we are seeing renewals of 20, 40, 50, even 100 percent in different plans. We're seeing an uptake in large claims everywhere right now. That is a driving force here as well as other plans," he said.

Bill Rivers of Segal, who reported on the current and projected financial status of the fund, said: "In the 30 years that I've been in this business, I can't remember a time when health and welfare funds and retirement plans were both in the severe trouble they're in at the same time and certainly in the magnitude that they're in. There truly is no place to hide." He commended the dedication of executive committee members to finding alternatives to help the fund and to help keep benefits as solid as possible for participants.

Averaged into the aggregate premium increase are a 44 percent increase for medical coverage; 41.7 percent increase for Medicare supplemental; 30.8 percent for dental; 43.4 percent for short-term disability; 18.2 percent for prescription drugs; and 17.8 percent for vision. Groups in the fund can select their areas of coverage and not all groups subscribe to all coverage areas.

The fund is governed by a board of trustees made up of union and employer representatives and union and employer co-chairs. GCIU Vice Pres. Lawrence Martinez serves as fund secretary and Martin Ganzglass of O'Donnell, Schwartz & Anderson serves as legal counsel. The fund employs Central Data Services Inc. (cds) to administer the fund and process claims for medical, Medicare supplemental, dental, and disability benefits.

New HMO option

Groups in the fund have five medical plan options, six prescription drug options, and three dental options that vary in basic cost, co-pays, deductibles, network utilization discounts, and services covered.

From left are: Neenah 77P Pres. Thomas Englebert; GCIU Pres. George Tedeschi; and James Miller, Kansas City 235M.

Managed health care networks in the fund include the nationwide Private Healthcare Systems (PHCS), Associates for Health Care (AHC) for groups in Wisconsin, and HealthLink for the groups at Quebecor's Effingham, Ill., plant.

Trustees approved a new HMO option developed by the executive committee. The HMO is operated by CIGNA and is an open access plan, which allows participants to seek help from specialists without first getting approval from a primary care doctor. The CIGNA HMO network includes some 285,000 physicians and 3,600 hospitals in 43 U.S. markets.

Robert Lindgren, employer co-chairman of the fund, asked for on-going input from trustees on the new HMO option with regard to their geographical areas. "This is a product we are building so we need your help in terms of getting this right. We need to have an HMO alternative that works for you and works for the national fund. . . . It's a matter of let's work together to make this work."

PHCS representatives Stephanie Wentworth and Nick Zaffiris reported that the number of hospitals included in the PHCS network increased from 3,174 in December 2001 to 3,294 in December 2002. The number of providers increased from 354,923 to 379,650 over the period.

New to the PHCS network are ambulance services in some areas, Wentworth said. She added that PHCS also redesigned the provider search on its website (www.phcs.com) to provide members with more search options and better results.

Pharmacy benefit managers for the fund include National Prescription Administrators (NPA) and Eckerd for the Quebecor group in Effingham, Ill. The fund negotiated and trustees approved new contracts with both NPA and Eckerd that will provide savings for the fund.

Ellen Perlman, NPA vice president for account management, said that following NPA's acquisition by Express Scripts in April 2002, NPA became the designated labor division for Express Scripts. She said there are some 6 million participants in NPA in some 600 labor groups.

Among the new features for participating groups, Perlman said, is the facility for downloading a group's report from a secure website address. NPA also increased the return to local funds for formularies from 75 percent to 80 percent. Formularies are prescription drugs for which Express Scripts/NPA has negotiated discounts with the manufacturers.

In other areas, trustees approved administrative changes that changed the end of the plan's fiscal year to May 31st instead of Sept. 30 and established a new rate change date of Jan. 1.

HIPAA deadlines near

Rivers and Ganzglass reviewed requirements for the national fund and local funds under the new Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA requires health care providers, administrators, vendors and employers to transmit health care information electronically via computers and to protect the privacy of citizens' health care information. The electronic requirement deadline is Oct. 16, 2003, and the privacy requirement deadline is April 14, 2003.

Noting the high costs and intensive administrative requirements of the new law, Ganzglass said HIPAA "is going to make Y2K look like a cakewalk. It really is a horrendous burden."

Trustees approved a motion to make Charles W. Breitsman of cds the privacy officer for the fund. Breitsman said cds is developing an implementation schedule for the electronic data exchange component of HIPAA for the fund. On the privacy component, Breitsman said it will require a lot of background work in terms of confidentiality agreements. One aspect that is known, he said, is that physical access to health insurance records must be restricted. For example, he said, cds has had to rearrange walls to make sure that foot traffic does not go near areas where health insurance records are.

Working together

GCIU Pres. George Tedeschi commended the trustees for their dedication to improving health care for their union members and employees. As a trustee on union pension funds, he said, "I see problems due to the stock market and the economy. Everybody is making real tough decisions."

"One good thing is when we sit in an environment like this – the management and union trustee environment – the concerted effort of all the trustees is for the welfare of the people, the members that you represent or the employees that you have in your plants. You work to do the right thing for the people," Tedeschi said.

Douglas agreed. "I've heard on more than one occasion from people outside the fund who said to me that if a stranger came into this room and knew what the parties were supposed to be, they couldn't tell by listening to the dialogue who was who – whether they were union or management. The history of this fund has always been that we're a body of people here to do a particular job and we've taken off our union and management hats and done the best thing for what the fund needs. . . . I think that's a credit to the entire national fund."

James Anson, right, of Associates for Health Care updates Wisconsin trustees on the PPO.

Uninsured, premiums rise to worsen crisis in U.S. health care Driven by higher hospital and prescription drug costs, health care spending in the United States increased by 8.7 percent in 2001 to $1.4 trillion, according to the federal Centers for Medicare and Medicaid Services (CMS). The highest annual increase since the early 1990s, the 2001 rise compared with a revised 7.4 percent increase in 2000 and 6.1 percent in 1999. The 2001 increase in health care spending also outpaced the growth of the economy three-fold, CMS said. Health care spending in 2001 consumed 14.1 percent of gross domestic product, compared with 13.3 percent in 2000, CDS said. Meanwhile, more than 41 million Americans were reported to be without health insurance last year – 1.4 million more than in the previous year, according to the AFL-CIO. GCIU Secy.-Treas. Gerald H. Deneau said the health care crisis is "really hitting American families hard as employers shift costs to them to avoid higher insurance premiums and layoffs usually mean the loss of health insurance. Family budgets are stretched thin by escalating medical and prescription drug costs, especially workers at companies that don't contribute to health care benefits." "Yet the silence is deafening from our government and even most of our citizens," Deneau said. "If the United States could do just one thing that would help families the most, it would be to establish a national, universal, guaranteed health care system. We in the labor movement need to revive the grassroots movement for a national health care program and we need to do it now," he said. CMS said hospital spending increased by 8.3 percent in 2001 and accounted for 30 percent of the health spending increase. Prescription drug spending grew by 15.7 percent in 2001 – a slowdown from the escalation of 16.4 percent in 2000 and 19.7 percent in 1999. According to CMS, private health insurance premium growth accelerated for the fourth consecutive year. Premiums rose by 10.5 percent in 2001 to reach $496.1 billion. Hewitt Associates, a consulting firm, reported that health insurance premiums in 2002 rose 13.7 percent based on its survey of some 2,000 health plans. Hewitt projected a 15.4 percent average premium increase for 2003. An analysis by Bradley C. Strunk, Paul B. Ginsburg, and Jon R. Gabel in Health Affairs said that the increase in health insurance premiums in 2002 was lowered several percentage points because of significant "buy-downs" by employers. Buy-downs mean reduced benefits for workers and their families. Based on its survey, The Segal Company projected a 20 percent increase for prescription drug costs in 2003 and a 14 percent increase in health care plan premiums. Segal said that, at the current rate of increase, the cost of health care coverage in the United States is projected to average nearly 25 percent of wages in less than five years for many employers.