When Health Insurance Is a Tough Sell
Jennifer Blackwell steps inside a garment shop in downtown Los Angeles and strides toward the owner, past a clutter of eyelet-laced blouses and two women whose faces are covered with veils.
“Hi, I’m Jennifer,” she says, extending her hand and then a card. “I’m a broker for the California Fashion Assn.” The man peruses her card. But before she has finished her pitch, he turns away and sneers, “Get out.” Then he spits on her blue suede shoes.
As she went door to door in the gritty garment district, Blackwell knew it would be tough to sell health insurance because of its costs. But she didn’t anticipate the huge barriers stemming from cultural differences.
Blackwell thinks the shop owner who spat on her shoes, an immigrant from the Middle East, was unaccustomed to a woman standing toe to toe with a man about a business matter. Some Asian employers, she’s learned, may be more inclined to ignore health insurance for themselves and their workers because they never dealt with anything like it in their native lands. Language is another obstacle, as are the complexities of the health-care system. She’s also been stymied by widespread mistrust, on the part of both employers and employees, toward each other and especially toward outsiders like her.
“It’s been difficult,” she says with obvious understatement. Adds her husband and business partner, Roger, a former executive at Aetna, a leading big insurance company: “I think it’s a conceptual barrier.”
With new capital and sweat, immigrant business owners and workers have contributed dramatically to the region’s economy in recent years, helping revive or build industries such as apparel, furniture, toys and food processing. But many of them do not offer medical benefits, and immigrant employees in those and other low-wage industries such as restaurants and hotels represent a large and growing element of California’s health-care crisis.
Statewide, only 40% of immigrant workers get medical coverage through their employers, according to UCLA’s Center for Health Policy Research. That contrasts with more than 70% for non-immigrant workers. Nationwide, only a tiny fraction of those without job-based coverage buy private insurance on their own.
In Southern California, about half of the 2.5 million workers without health insurance are immigrants. Most of them are Latino. The vast majority work for small employers, which x are far less likely to offer medical benefits than large companies. The insurance rate is especially low in the garment industry, which employs roughly 150,000 people in the region.
“The challenges are really significant,” says Linda Wong, of Community Technologies Development, an inner-city economic development group in Los Angeles. “Many of these small employers are isolated. They’re not affiliated with chambers or trade groups. They have very high failure rates.”
But Wong, Blackwell and others in the insurance industry, along with community activists, are now turning their attention to them. The California Fashion Assn., for example, developed with Blackwell a purchasing group plan to give small garment employers better rates, and insurers such as Aetna have recently enlisted.
The Korean Immigrant Workers Advocates is gearing up to hold health fairs and has launched a study to look at ways to finance insurance for the thousands of Korean and Latino workers employed in Koreatown restaurants. “We plan to appeal to their own self-interest,” Roy Hong, the labor group’s director, says of restaurant owners.
But as Blackwell’s experience on the street illustrates, that will not be easy.
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After a year of mailings, ads in trade papers and visits to hundreds of shops, she has signed up about 1,000 workers at three dozen firms. That’s well short of her anniversary goal of 2,500. Her numbers would be even smaller were it not for enrollees who had insurance before but switched. She’s had practically no success with the thousands of Asian mom-and-pop wholesalers, contractors and manufacturers. Even with language interpreters, she is often shooed away, her business card discarded or lost among swatches in desk drawers.
Still, Blackwell says she won’t stop. She gets a commission for her sales, and her plan is to work the nearby toy district next. “Down the road there is a payoff,” she insists.
Not everyone would bet on it.
Joe Rodriguez, head of Southern California’s Garment Contractors Assn., for one, doesn’t see an improvement in the health insurance problem in the garment business until there is fundamental industry restructuring.
Contractors constitute the largest segment of the region’s apparel trade. But as it is now, says Rodriguez, they can barely afford to operate, given the foreign-labor competition and the way the sewing work is supplied to them, through a network of middlemen who take a sizable cut from manufacturers and leave crumbs for contractors.
“Many of them can’t cash their own payroll checks because it would bounce,” he says of his 200 member firms, only one or two of which now offer health insurance.
Last year Rodriguez invited Blackwell to a membership meeting to talk about the fashion association’s health alliance plan, which in its cheapest form costs about $90 a month per individual policy and $250 for full family coverage--which are competitive rates by industry standards. So far, no one from Rodriguez’s group has signed up.
“It’s the proverbial horse-to-water thing,” says Ilse Metchek, a longtime garment-business owner who now directs the California Fashion Assn. Metchek enlisted Blackwell in the hope that the health-insurance campaign would, among other things, help improve the industry’s poor image. She says it’s understandable that immigrant employers will need time to adjust to the ways here. But her frustration at the lack of response is apparent.
“It’s not even a matter of money,” she complains, in sharp disagreement with Rodriguez. “It’s a way of doing business.”
Most apparel and textile operators in the Southland are emigres from east or southern Asia, where people are more likely to go without insurance or look to government, not employers, to take care of their health needs. So it is far harder to convince them of the merits of buying something that they had never paid for before and that they may or may not benefit from right away.
Unsure of its value and strapped for cash, many of these small employers, like their employees, are willing to forgo insurance. Employers generally have more means to pay cash for medical services as they come up. But some don’t, and emergencies can be devastating to employer and employee alike.
On one recent sales visit, Blackwell enters a resort-wear supplier on Santee Street, where owners Mike and Diksher Om give her an unusually warm welcome. The Oms are from India and speak English fluently. After admitting that they don’t have insurance for themselves and their two employees, they listen intently and with surprise as Blackwell runs through the fashion industry’s plan in rapid fire: $5 co-pay per doctor visit, $2 for prescription drugs, no medical questions, no preconditions.
“We have awesome rates,” Blackwell says.
The Oms agree to meet with her again, but later Diksher Om expresses doubts. She suggests that it’s cheaper to risk going without insurance and paying as things come up. When she had a baby a few years ago, she says, the couple paid several thousand dollars--all cash.
“That’s how it’s done in India,” she says.
More than any Asian American group in the region, South Koreans have very high self-employment rates. Most are immigrants, and they have a particularly big stake in the garment trade. Yet despite their relative affluence and high education, Korean Americans have the highest uninsured rate among Asians: a whopping 40% in California.
Jay C. Chee, publisher of the Pacific Textile and Apparel News, a Korean-language monthly in Los Angeles, thinks culture has a lot to do with that.
“Virtually we all grew up without health insurance,” says Chee, who has talked to some of his 2,300 subscribers about the issue. “If you get sick, you visit the hospital and pay in cash.” He concludes: “They have a vague, weak concept about health insurance.”
There are exceptions, of course. In the toy industry, for example, A&A; Plush in Compton provides medical benefits to all 50 of its employees.
“The president, even though he’s a Korean immigrant, had lots of experience working overseas,” says vice president Alan Kim. “He’s been exposed to the Western culture and knows what kind of benefits we need to give to get good employees.” Kim adds that in 1994, A&A; improved its health plan, making it more affordable and useful to workers. “In 1994, one employee left every month,” Kim says. “Last year, we had only one worker leave. . . . I think the health insurance is worth it.”
In fact, that has been Blackwell’s mantra. “You’ll see, it’s going to save you money,” she tells her customers.
For employers struggling to make ends meet, that argument usually doesn’t do a thing. But for those with a bit of cushion, Blackwell says it’s sometimes enough to close a deal.
One of her latest successes came at Bonkers Clothing Co., a junior-sportswear maker in Vernon. Co-owner James Garbell is not an immigrant, but most of his 60 employees are. For years, he says, he and his wife, Rita, sprang for medical benefits only for a handful of office managers.
But he says Blackwell’s rates were far more affordable than quotes he had gotten in the past, and he believes the benefit will pay off in the long run. So starting this spring, Garbell extended the coverage to all workers, including cutters and sewers. Garbell never imagined how much his workers wanted and valued such a benefit.
“They’re thrilled; they’re thanking me like I gave them a car,” he says.
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Such gratitude is indeed rare in apparel manufacturing, where employer-employee relations are fairly adversarial--a contributing factor to the high-uninsured problem. In her rounds, Blackwell often hears employers grumbling that they wouldn’t give health benefits because their workers don’t appreciate them. Turnover is high, loyalty low, and if they were to provide medical insurance, employers ask, will workers demand to get other benefits like sick pay?
Many garment workers, on the other hand, see themselves as being exploited and have come to distrust employers. So there is little expectation on their part as well. And in a cutthroat industry with a huge underground element, and in which government agents are raiding businesses and sometimes expelling illegal immigrants, both employers and workers remain deeply suspicious of institutions, including those in the traditional medical field.
“Immigrant workers are not as demanding at that wage level, and this particular industry has historically taken advantage of immigrant labor,” says Norbert Chung, an area vice president of Arthur J. Gallagher & Co., an insurance brokerage in Woodland Hills that specializes in small businesses. There is practically no incentive for these employers to offer it, Chung says.
“The employers see it as a cost item that they don’t have to have,” says Hong, head of the Korean Immigrant Workers group. But inevitably, he adds, some employers will be persuaded of the indispensability of health insurance after they or a family member suffers a serious illness.
“There’s enough compelling stories of employers who got hurt,” Hong says. “They work like dogs themselves. They get sick, and they blow their savings.”
Blackwell hopes it won’t come to that before employers buy insurance from her, although she has already enrolled quite a few after just such a crisis. Blackwell recalls that during a cold call last December, one couple signed up instantly because their baby had suddenly fallen ill.
Blackwell thinks of the man who spat on her shoes. Her plan is to send a male employee of hers to make her case. If that doesn’t work, she says, she’s prepared to face him again.
“I’ll keep going back,” Blackwell says. “Eventually he’s going to realize he needs insurance.”
* SICKLY REPORT: The L.A. area lags the nation in health insurance coverage for workers. A1
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Workers in L.A. County: Who’s covered, Who’s not
Race
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Uninsured Job-based coverage Private Insurance Medicaid Latino 52% 42% 1% 5% White 13 75 10 2 Black 19 73 3 6 Asian 33 58 8 1 Total 32 60 5 3
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Citizenship
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Uninsured Job-based coverage Private Insurance Medicaid U.S. citizen 20% 71% 6% 3% Immigrant 58 35 3 4
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Education
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Uninsured Job-based coverage Private Insurance Less than 9th 67% 27% 1% grade High school 43 49 3 College and above 18 73 8
Medicaid Less than 9th 5% grade High school 4 College and above 2
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Class of Worker
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Uninsured Job-based coverage Private Insurance Medicaid Employee 31% 62% 4% 3% Self-employed 39 35 22 3
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Work Force Size
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Uninsured Job-based coverage Private Insurance Medicaid less than 10 46% 37% 13% 4% employees 10-24 48 40 7 5 25-99 38 56 3 3 100-499 31 64 2 4 500 or more 18 78 2 2
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Industry
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Uninsured Job-based coverage Private Insurance Construction 49% 39% 8% Manufacturing: Durable goods 24 68 5 Nondurable goods 47 49 2 Transportation and 23 73 3 communications Wholesale 30 61 5 Retail 44 47 6 Financial services 20 68 10 Business/personal 35 53 7 entertainment services Professional 21 71 5 services Government 14 85 0
Medicaid Construction 4% Manufacturing: Durable goods 3 Nondurable goods 3 Transportation and 1 communications Wholesale 4 Retail 3 Financial services 2 Business/personal 4 entertainment services Professional 3 services Government 1
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Note: Figures in some categories do not total 100 because of rounding.
Source: UCLA Center for Health Policy Research, based on March 1998 survey of workers age 18 to 64
