Actors’ Health Benefits Taking a Hit

They have long been considered Mercedes-Benzs among health insurance plans, and their generous benefits have helped make up for the sporadic paydays endured by most members of the Screen Actors Guild.

But the fast-changing economics of health care have caught up with the Screen Actors Guild-Producers Pension and Health Plans: Members are being notified that many of them will be dropped from the plans over the next few years and those who manage to stay in will pay considerably more.

At a time of double-digit annual health-care cost increases fueled by rising spending on drugs and aggressive price hikes by doctors and hospitals, the sticker shock facing SAG members is typical of what is happening to workers around the country.

Even union-negotiated health plans, with gold-plated benefits that have been taken for granted for years, are being downsized to reflect the new realities.

“No one is immune from these cost increases,” said Kirby Bosley of the Los Angeles office of William M. Mercer, an employee benefits consulting firm. “Not even the entertainment industry.”

At a time when the guild acknowledges that up to 75% of its membership fails to earn the bare minimum of annual income required to maintain SAG benefits, the changes, which take effect Jan. 1, 2003, will mean that a much smaller percentage will qualify in the years to come.

The amount of income that actors will have to earn to qualify for the SAG health plans will increase 32% to 71% from 2003 to 2008, depending on which plan they are in.

SAG health-plan administrators said they were forced to make the changes in response to economic conditions that are becoming common in the nation’s health-care system, along with an additional factor peculiar to the entertainment industry.

Although the qualifying earnings requirement held at $7,500 a year since 1996, the costs of providing health benefits rose from $102 million in 1996 to an estimated $152 million in 2001. Prescription drug costs, for example, rose 142%, from $9.5 million to an estimated $23 million.

And although the number of SAG members enrolled in the plans increased by 17% over those five years to 40,156, members’ contributions to the plans declined, which the guild blames on a decrease in members’ earnings because of runaway productions to Canada, Australia and other foreign locales.

“Earnings were not keeping up with costs even in robust times,” said Bruce Dow, administrative director for the SAG health plans. “Last year, we ran a $9-million deficit in our self-pay plan” for actors who don’t qualify for SAG benefits but are allowed to keep their health coverage by paying the full cost.

Experts say that many SAG actors will be forced to moderate career aspirations to find health benefits elsewhere or hope that they remain healthy, if uninsured. Others say that the changes won’t solve the union’s problems and that it will be under increasing pressure to offer a third option: low-cost, bare-bones health care to a majority of its members.

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Union Under Pressure to ‘Help the Small People’

SAG’s problems are not unlike those facing other union-negotiated health plans, which typically feature generous benefits at low cost to members, said Alan M. Garber, professor of medicine and director of the Stanford University Center for Health Policy. But with fewer and fewer members able to qualify for those benefits, SAG “will be under pressure to help the small people.”

“There is no easy solution,” added Garber. “There will be pressure to offer a low-cost plan to cover more members, and a pretty good low-cost plan at that.”

Many of the actors and actresses contacted for this story were unaware of the new requirements, and were staggered by the extent of them.

“It’s probably going to be impossible for me to earn enough now and I’m not sure I should even try,” said 65-year-old Andre Marcellus, a Santa Monica-based actor who has done national commercials and small roles on “Murder One,” “NYPD Blue” and “Star Trek: Voyager” television series. “I’ve been acting since the 1970s and most years I didn’t make much more than $1,000. It’s only in the last eight years that I’ve been able to make $7,500.”

There are two SAG health plans for actors. Plan II, the lower-cost option, pays 100% for many procedures by providers that are in the network.

Plan I provides 100% coverage for doctors and hospitals in and out of the network. In California, SAG health plans use Blue Cross preferred provider network. For all out-of-state actors, the plans use Private Health Care System.

Beginning in 2003, actors will have to earn $9,000 in SAG contract earnings or work 61 days, instead of the $7,500 or 60 days that have been required since 1996. That will rise steadily to $11,000 in 2007, an increase of 32% over 2002.

This year, Plan I members either had to have $15,000 in SAG wages or $7,500 in wages combined with 10 years of earned eligibility, meaning 10 years of earning enough to qualify for SAG benefits. Beginning in 2003, credit for earned eligibility for Plan I will be dropped and all Plan I members will have to earn $20,000.

That requirement also will rise steadily to $26,000 in SAG wages in 2007, an increase of 42% for those who do not meet the earned eligibility discount and an increase of 71% for those who do get the discount and choose to remain in Plan I in the coming years.

Those able to meet the new standards will face other cost increases, such as a more than doubling of deductibles for major medical procedures and higher co-payments.

So-called A-list actors, who account for 2% of guild membership, won’t be affected by the benefits changes because their annual incomes exceed the cutoff.

And the so-called middle-income actor, such as someone in a recurring support role on a television series, will make enough annually to qualify for coverage, said Ilyanne Morden Kichaven, spokesperson for SAG.

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Most Actors Will Feel Benefits Changes Deeply

But the vast majority of actors, who work infrequently and earn little, will feel it deeply.

Monica Muniz of Sierra Madre, for example, earned her SAG membership in a role in the 1998 movie “Judas Kiss.” But since then, the 26-year-old Puerto Rico native has been unable to earn the $7,500 required for health coverage. She had one nationally televised commercial for Tylenol in 2001 and recently shot her second commercial, a spot for Coors Light.

“I’m surprised. I’m shocked. That’s a really big increase,” said Muniz when informed of the new earnings requirements.

Muniz said that she had been looking forward to qualifying because she hasn’t been to a dentist in three years and remembered a veteran actress telling her how well her son was cared for after a car accident.

“She went on and on about how great the SAG health plan was. Great benefits, great doctors,” Muniz said. “Now that just seems farther and farther away from me.”

Muniz said that she is considering a different career, as a yoga instructor, so that she can earn enough to buy health coverage. In the meantime, she said, “I’m just trying to stay healthy and go out on a lot of auditions.”

Marcellus is in a different quandary. At 65, he had hoped to work two more years to have 10 years of earned eligibility, but that won’t matter under the new standards. Marcellus is a former member of the Army’s 11th Airborne Division so he can at least rely on veterans’ benefits.

“It used to be that one good job would take care of it, get you over the earnings requirement,” Marcellus said. “That won’t be the case anymore.”