Some attorneys can't afford benefits, enroll with spouse instead.
As the U.S. Supreme Court prepares to release its decision next month on the constitutionality of the Obama administration's Affordable Health Care for America Act, the state is waging its own battle to rein in rates.
In the midst of the fray are small law firms and sole practitioners, many who say they can't afford skyrocketing health insurance costs because of their lean budgets. Some lawyers at small firms said the rising costs have prevented them from hiring more lawyers and staff because they're unable to offer a full benefits package. And because premiums, whether for a small group from two to 50 or an individual plan, are based on age, insurance brokers noted that those costs will only increase over time.
Laurel Kaufer, a Los Angeles sole practitioner and mediator, said Anthem Blue Cross raised premiums on her individual family plan policy by 500 percent in 12 years.
This year, she became the first person to sign a petition for a November ballot initiative that would require insurance companies in California to justify any proposed health insurance rate increases and get the state insurance commissioner's approval before the increases could take effect.
"As a self-employed single mother with two sons, I have struggled for more than a decade to balance the cost of health care and health insurance with the need to seek medical help," she said. "My sons are nearly grown now and mercifully healthy, but the rising cost of health insurance hasn't gone away."
A similar effort to rein in health insurance costs – which failed prior attempts – is making its way through the state Legislature in the form of HB52.
"Having affordable health insurance is a perennial problem for lawyers," said Jamie Court, president of Consumer Watchdog, the taxpayer advocacy group that's sponsoring the ballot initiative. "[Insurance companies] keep raising rates, with no end in sight and no one to stop them. It feels like a shakedown."
Court said small firms and sole practitioners are some of the businesses hardest hit by the increases and the least able to afford them.
California Association of Health Plans, a trade group representing 39 full-service health plans in the state, disputes the objectives of the ballot measure and the bill, saying they would offer no relief to consumers and would drive costs higher by creating more bureaucracies. Association spokeswoman Fiona Hutton said Consumer Watchdog is financially motivated, standing to rake in "tens of millions" of dollars in intervenor fees if the measure passes.
"Health plans provide comprehensive high-quality coverage to more than 27 million Californians at a price that – in a high-cost state – is around the national average," the association said in a statement. It added that 87 cents of every dollar in premiums pays for medical costs, with only 3 cents of the dollar going to insurance company profits. The rest goes to providers and other costs.
Kaufer, who said she's been advocating for health insurance reform for a decade, sees it differently.
She said she recently tried to switch insurers and applied for an individual plan Blue Shield offered through the UCLA Alumni Association. But while the insurer accepted her two teenage sons at a lower rate than she'd been paying for them under her family plan, it rejected her. The reasons listed in a March 1, 2010 letter included perimenopausal symptoms, Achilles tendonitis, mild seasonal allergies and staples in her right wrist from a 12-year-old surgery.
So she said she's stuck with Blue Cross.
"The problem," Kaufer said, "is individual policyholders are the ones getting left holding the bag because they have no leverage to negotiate."
A Blue Cross spokesman referred comments to the trade group.
Kaufer isn't alone in her frustration.
Christopher Prince, co-founder of four-lawyer bankruptcy and litigation boutique Lesnick Prince LLP in Los Angeles, said the high cost of health insurance premiums has made a difference in whether his firm decides to hire more lawyers or staff. He said three-quarters of the firm's employees are insured through their spouses' policies.
"I can tell you that when I'm figuring out whether to hire a secretary or paralegal that health insurance … is a big part of the consideration," he said, estimating that the premiums cost the firm 25 percent to 30 percent of an employee's salary. Prince, who's insured through his wife's policy, said that from his firm's perspective and in talking to other lawyers, rising health insurance costs are a deterrent to hiring people on a permanent basis.
Prince's partner, Matthew Lesnick, said he saves money on his individual plan by opting for a $5,000 deductible – which he calls a "perverse disincentive" to health care because it prevents him from going to the doctor unless he knows he'll exceed the deductible.
Pasadena bankruptcy lawyer Dheeraj K. Singhal, founder of the three-lawyer DCDM Law Group, said he gets around the problem by hiring part-time employees. Like most small firms, he said his competes in the marketplace by charging clients lower hourly fees than bigger firms. So for the firm to stay viable, he said he foregoes the soaring cost of employee health insurance, although he said he's hoping to offer a group plan in the future.
Some solo and small firm lawyers said they've found help through the American Bar Association, which works with members of its General Practice, Solo and Small Firm Division to help them find an affordable a plan in their state.
While the ABA doesn't offer a group medical plan, Kelly Abeles of the American Bar Endowment, the bar's charitable arm, said members can contact the American Bar Insurance Plans Consultants Inc. The consultants will refer members to its broker, licensed in 50 states, to find the best deal for them at a membership discount.
On a local level, State Bar of California Deputy Executive Director Robert Hawley said regulations prevent the organization from underwriting insurance for its members because it's a licensing agency, not a voluntary group.
A spokeswoman for The Bar Association of San Francisco said it doesn't underwrite or offer health insurance, either. The Los Angeles County Bar Association, the state's largest voluntary bar organization, referred inquiries to its broker, Insurance Specialists Inc., which didn't return multiple phone and email requests for information.
Meanwhile, any changes appear to be up to voters or the Legislature.
Pat McConahay, deputy press secretary to state Insurance Commissioner Dave Jones, said all the commissioner can do now is try to deter insurers from increasing rates by posting increases on his website, "but it has no teeth."
"The commissioner believes that regardless of what happens in the [U.S.] Supreme Court, California is moving forward to implement reforms."