Soaring health care costs continue to clobber Hollywood’s work force with the Directors Guild of America unveiling tightened benefits and eligibility requirements.
“One of the most significant challenges facing the nation during the last decade has been finding solutions to address the alarming rise in health care costs,” the DGA said in its monthly member magazine. “The DGA-Producers Health Care Plan has not been immune to the crisis and has experienced the same double-digit cost increases as other plans over the last few years.”
The announcement made in a “special report” to the 12,000 DGA members, follows similar plans from WGA West (Daily Variety, May 2). The DGA’s number-crunching shows that producer contributions to the plan — generated by members working under DGA contracts — have remained fairly consistent from $40 million in 1996 to about $48 million last year. But annual benefit costs have jumped in that same period from less than $30 million to more than $65 million.
Key changes from July 1 include changing its provider network in California from PHCS to Blue Cross, which will up the number of doctors; creating a premium coverage tier for those with annual earnings over $90,000; increasing the deductible for a family from $600 to $900; increasing monthly premiums for retirees and spouses under 65 to $100 from $60.
On Oct. 1, the plan will start charging the first-ever premium for dependents, set at $600 annually; and on Jan.1 it will boost the minimum earnings to qualify for health coverage from $27,900 to $28,700.
This comes in the wake of similar moves by the WGA, SAG, AFTRA and IATSE, which negotiated an increase in producers’ contributions for its West Coast locals earlier this year.
DGA president Martha Coolidge had warned in January that the DGA plan, jointly administered by Guild and industry trustees, faced an $8 million deficit this year and would be forced to reduce benefits, mainly due to health care costs rising 15% in each of the past three years.
The DGA plan went from a $5 million surplus at the end of 2000, to a $3.2 million deficit by the end of 2001 and a $7.8 million loss at the end of last year even though self-pay coverage was reduced last year and prescription co-pays were hiked.
Benefits committee chief Burt Bluestein said the $8 million swing in the bottom line during 2001 was due almost entirely to increased costs. “We had to look at something to stop the hemorrhage or we would be putting all of our members’ short- and long-term health care coverage at risk,” he added.
Jay Roth, DGA national exec director, said the main objectives in revamping the plan were to ensure the highest benefits for catastrophic and major illnesses, to continue to provide full health coverage for members at past income levels and maintain existing retiree coverage. “I am proud to say that we accomplished those goals and were able to restructure the plan to be able to ensure its future financial viability,” he added.
The DGA said the only major difference between the premium tier, dubbed Premier Choice, and the tier for those with earnings below $90,000 will be in coverage of costs outside the network with out-of-pocket expenses (after deductible) capped at $3,000 for the premier tier and $7,500 for the lower tier. The Guild said that about half of its 12,000 members would fall into each tier.
The DGA noted that half the health benefits paid in the past had been for spouses, partners and dependent children, adding that trustees determined that the annual dependent premium of $600, regardless of the number of dependents, would be “fair and equitable.”
“This relatively small premium, spread over the thousands of participants, raises millions of dollars that can maintain current Plan benefits and avoid potentially deep benefit cuts,” the DGA added.
Bluestein said the changes are designed to save the plan $6 million annually with only changes in coverage.
The DGA will hold a May 19 member meeting on health care at its Los Angeles headquarters and another confab at its Gotham facility on May 28.