Supporting Healthcare Coverage for Workers, but Not Prop. 72

A long-standing tradition reigns at Titan Spring & Wire Products Inc. in North Hollywood, where workers receive health insurance but don’t pay for it.

They haven’t paid for it for more than 20 years -- and they won’t as long as the company can afford to pick up the tab for its 40 workers, says Titan President Jim Glenn, whose company manufactures precision coil wire springs found in heart valve monitors and pressure switches.

Glenn sees many reasons to offer the coverage, most of which can be summed up in one principle: If it’s good for business, do it. That principle explains Glenn’s fierce opposition to Proposition 72, which would require some California businesses to pay for health insurance.

“It is not good business for Sacramento to start legislating what businesses have to do,” said Glenn, who pays 100% of medical insurance costs for his workers but not their families. “You have to be flexible to maintain your competitive position with people in other states and other countries.”

The dilemma confronting workers who lack health insurance is now a topic of national debate. In California, where 6.5 million people lack medical coverage, the issue is on next week’s ballot in the form of Proposition 72.

Approval of the measure would uphold a law passed last year requiring business owners with 50 or more employees to provide health insurance to workers or pay into a state-run plan.

A Los Angeles Times poll earlier this month found that 46% of likely voters would approve the measure, 29% opposed it and 25% were undecided.

With clinics closing and emergency rooms overflowing with the uninsured and underinsured, supporters say the measure would increase the number of people receiving care.

But opponents -- even those who want to insure their workers -- say forcing employers to pay for health insurance would worsen the state’s already bad business environment.

Opposition to Proposition 72 has brought together an odd mix of interests that otherwise might never meet on common ground: theater owners, pest control workers, restaurant owners, school districts and chambers of commerce.

“We’re not opposed to people having insurance,” said Larry Phelps, superintendent of the Mojave School District, which opposes Proposition 72. “We have no way to generate more revenue to pay for this. There’s no consumer to pass costs on to.”

Those costs are huge and growing -- affecting not only workers’ health but the health of the businesses that employ them, said Victoria Lowe, owner of Acclaim Solutions, a temporary workers’ agency that employs about 400 people.

“As a business owner, I would love to see every employee have the opportunity to have health insurance,” said Lowe, whose Culver City-based company was formerly known as Alert Staffing. “The cost of health insurance has gone up so tremendously, for smaller companies it would be a financial hardship to have to do it.”

A better solution must include contributions from government, business and insurance companies, Lowe said.

Recent pro-Proposition 72 television ads suggest proponents have their sights on a much larger target than Acclaim Solutions or the Mojave School District.

The commercials target Wal-Mart, claiming the giant retailer costs the state $32 million annually. The group says that is what the public pays to provide care to Wal-Mart employees who cannot afford health insurance.

Wal-Mart officials deny the claim and have responded by donating half a million dollars to the effort to defeat Proposition 72.

Wal-Mart aside, opponents say most California business owners already walk a tightrope between the dictates of good business and the dictates of state government. In an ailing economy, one more burdensome mandate could leave some businesses teetering.

“[Legislators] don’t know what we go through,” Glenn said.

At Titan Spring, the tradition of paying for employee health insurance started two decades ago with Joseph W. Park, Glenn’s father-in-law, who founded the company in 1957. Titan covers the cost of each worker’s healthcare insurance after six months on the job. Workers have the option of paying to cover family members.

“You care about your people,” Glenn said. “They’re a part of the team. They make you money. If you can do something for them and it’s reasonable, then you do it.”

The medical benefit is one of the reasons workers stick around, he said.

But in the last two years, Glenn has changed insurance providers from a PPO to an HMO in a bid to hold his costs below $100,000. Employees, who weren’t required to pay deductibles, are now charged $1,500 for each hospital stay, and co-payments for a doctor visit have increased from $10 to $35.

“The plan gets worse and worse and the money goes up and up,” Glenn said.

To add to the problem, the cost of workers’ compensation has also shot up, even though the company has had no accidents.

There’s a limit to what a company can afford, said Glenn’s wife, Judy. “At some point in time, we no longer become competitive. Eventually we have to raise our prices to meet these mandated costs.”

A state mandate to provide health insurance might force companies to replace workers with machines -- or pack up and leave California, Jim Glenn said. It might be only a first step; next could be a mandate to require employers, including small- and medium-sized business owners, to cover spouses and children.

Whether a company provides insurance should be a business matter, Glenn said.

“It’s a sweet deal,” he said of the Titan medical benefit. “We will do it as long as we can.”