As companies struggle, health insurance for workers at risk

Carina Esquivel found herself without health insurance during a layoff. | Credit: Adrian G. Uribarri

For a while, Juan Nieves says, he had high blood pressure and high blood sugar. Then, after his employer dropped his health coverage in May, he was diagnosed with diabetes.

"They told me that I could not get my medication because my health  benefits had been canceled," says Nieves, a factory worker at the SK Hand Tool Corp. "I was going crazy. I didn't know what I was going to do."

For the first month without health insurance, Nieves made do without his own medication. Eventually, he found a community clinic many miles away from his Southwest Side home, where he continues to order lancets and other diabetic supplies so he can live.

His situation is a symptom of the nation's economic recession. Falling profits have led businesses to cut jobs and drop employee benefits, and workers have grown worried that, even if they can keep their jobs, they might still lose their employer-sponsored health-care plans.

Labor unions, newly amplified voices in Washington's health-care debate, are having trouble allaying their concerns, and research suggests all this worrying could turn into more health problems for employees.

"These are difficult, difficult times," says Sarah A. Burgard, a research scientist and professor of sociology and epidemiology at the University of Michigan-Ann Arbor. "Many employers are facing really hard decisions trying to keep jobs local and do things here. So they're offering employees a choice: It's either going to have to come out of your pocket or you're going to have to go without."

Burgard's study, to be published in September, shows that persistent job insecurity poses a major threat to worker health in the United States. In one of the groups she studied, chronic worries about losing work were a better predictor of poor health than either smoking or high blood pressure.

And for some workers, the threat of losing health-care benefits is more grave than losing income.

Employees such as Nieves, at the SK Tools factory, say they have faced rolling layoffs for years, coming off the production line as often as every month since the economy crashed last year. But it was their recent loss of benefits that finally led them to strike against the Chicago company.

"Everything is negotiable, but not this," says Sergio Cobar, 52.

Cobar says he has worked at SK for 13 years, and that he and his family have come to depend on his health-care benefits. His wife takes medicine for high blood pressure, he says, and his son, now entering high school, must apply for government-subsidized health insurance in case he is injured or becomes ill on campus.

"The thing is, to pray we don't get sick," Cobar says.

Nathan Buckert, marketing manager at SK, says that, like many other industrial companies, his has experienced a downturn in business. The toolmaker is trying to streamline costs and "adapt to the new market conditions."

"We realize that employees want to have health care," Buckert wrote in an e-mail, "and we wish that we could provide them with coverage."

The SK situation illustrates an economic reality that has become painfully clear during the recession.

"Employers, in general, don't offer benefits because they're altruistic," says Larry S. Boress, president of the Chicago-based Midwest Business Group on Health. "They offer them for two reasons: to maintain and recruit talent, and to keep people productive on the job."

Under financial pressure, Boress says, employers have begun to look at those benefits more critically. Some have started charging higher premiums to smokers in group health plans. Others have carefully audited employees' dependents to make sure they are eligible for coverage.

More than a few have been cutting coverage altogether, bewildered by the dual uncertainties of an economic recession and a political debate over health care.

"There's a real yin-yang that's going on between the economy and the health-care discussion," says Jerry Roper, president of the Chicagoland Chamber of Commerce. "It has most of the companies like that squirrel in the middle of the road: They're just hoping they can dodge the oncoming traffic."

Roper says the debate over public health care has complicated matters for employers that already were struggling to survive during the economic downturn.

Yet some do not buy the recessionary argument in the first place.

Annemarie Strassel is a spokeswoman at U.N.I.T.E. H.E.R.E. Local 1. The union, a merger of the Union of Needletrades, Industrial and Textile Employees and the Hotel Employees and Restaurant Employees International Union, represents about 15,000 workers in the Chicago area.

Strassel says that at several of the city's hotels, where contracts with workers expire today, managers are using the recession as a spurious excuse for cutting back benefits. She says that while workers acknowledge the effect of the recession on their employers,  some companies are painting an excessively bad picture of their finances.

"The hotels are using the economy as an excuse not to offer health insurance," Strassel says, despite what she characterized as hefty, multibillion-dollar profits for many hotel companies.

Even at hotels that still offer benefits, some employees face a turbulent cycle of employment and unemployment that can leave their coverage status in limbo.

Carina Esquivel, 31, says hotel managers at the Hyatt Regency Chicago laid her off just before Thanksgiving last year. She says she had prepared for it because, during the previous two winters, the hotel temporarily released her and other banquet stewards to minimize costs during the slower cold season.

But the typically slow winter merged with a historic recession, and Esquivel says she was unemployed for five months before Hyatt managers called her back to work for the summer. In May, she says, after she had been back on the job for about a month, she sprained her ankle and visited a foot doctor for treatment.

"A month later, I have three bills from the doctor saying my insurance didn't cover it," Esquivel says. Her health benefits, which expired during her unemployment, had not kicked in again, leaving her about $675 in debt for one medical visit, she says.

"It's something that takes you by surprise," Esquivel says.

She says she is thankful that her three girls, 4, 6 and 10, are covered under her ex-husband's plan.

"What if my child was real ill?" she asks. "What would I have done?"
