(Published in the May 2010 edition of the UE News. UE is the abbreviation for the United Electrical, Radio, and Machine Workers of America.)
UE locals bargaining for their members’ healthcare will get little help from the Health Care and Education Reconciliation Act (HCERA) passed by Congress and signed by the president. While millions of uninsured will gain access to coverage, and for the first time the U.S. government will prohibit health insurance companies to deny coverage because of pre-existing conditions, there are harmful aspects to the new law. Much as NAFTA legitimized cross-border corporate exploitation of workers, HCERA confirms the domination of healthcare in the U.S. by private health insurance corporations, whose own maximum profit remains their overriding priority.
The new law endorses the insurance industry and employer push for high-deductible plans, health savings accounts and flexible spending accounts. Such schemes require working people to pay the first several thousand dollars of health service costs out of pocket before the insurer pays a dime.
HCERA also subtly sets the dangerous benchmark that 10 percent or more of your income should go toward the cost of healthcare. The legislation sets a threshold in 2014 that, only after you pay more than 9.5 percent of your income for health insurance do you qualify for a “premium tax credit”. In 2013 the legislation increases the threshold for the itemized deduction for unreimbursed medical expenses on your income tax return from the present 7.5 percent of adjusted gross income, to 10 percent of adjusted gross income.
The private health insurance industry will not only survive, but thrive, under this legislation which mandates everyone not covered by an employer plan to purchase health insurance. In my home state of Massachusetts, where the state legislated an individual mandate in 2006, we have the highest private insurance premium rates in the country.
An extremely troubling provision of HCERA says that, starting in 2014, an employer with 50 or more full-time employees will pay a $2,000 per employee penalty for not providing affordable health insurance. That could be the beginning of the end for employer-provided healthcare. It is hard to imagine that employers won’t notice that the fine for not providing insurance is a lot lower than the cost of premiums to insure employers. It’s not clear what will happen to those workers who lose coverage.
The so-called “Cadillac” tax will be imposed on plans that would have been considered “Chevys” just a few years ago. Most workers’ health plans have not gotten better or more luxurious – they’ve just gotten a lot more expensive. That’s not the workers’ fault, and the rise in overall premium costs is not really our employers’ fault either. It is the insurance companies, along with the pharmaceutical industry and big hospitals, that have made good health coverage so expensive that it seems like a luxury. But starting in 2018 HCERA levies a tax penalty on decent health insurance plans above a certain dollar limit – another subtle and dangerous message that there should be a financially penalty for having decent healthcare. In my part of the country, the Northeast, many employers’ health premiums are already high enough to qualify for the tax penalty.
The conversion of our health insurance system from managed care (HMOs) to high deductible plans and health savings accounts will continue to harm workers forced to make higher and higher up-front payments when they or their children need care. In the last four years the number of companies offering high-deductible plans has nearly tripled, from 4 to 10 percent in 2005, to 11 to 28 percent in 2009.
Healthcare reform did not have to turn out this way. The organization Physicians for a National Health Plan (PNHP) says that, with a payroll tax of just 3 to 5 percent, we could have a medicare-for-all single payer system that would cover every U.S. resident, and put an end to deductible, co-pays, and the insurance companies’ controlling our healthcare system. Employers would also have to contribute 6 to 8 percent of their total payroll to finance such a plan, but that is a lot less than the 20 to 30 percent of payrolls that they now hand over to the private insurance companies in the form of premiums.
The bill approved by Congress and the White House does some good, but will also cause us many problems. But because we are organized, we are not powerless. UE locals have the ability to shape how much we pay for health insurance. Whether we have a fee-for-service plan, an HMO, PPO, or HSA, we can fight to set limits on what our members pay for healthcare each year. Keeping our health insurance affordable, while it’s controlled by profit-driven insurance corporations, will continue to be very difficult, but with membership involvement and action we will find ways to make healthcare more affordable and accessible to our members, regardless of their health condition.
As is so often the case, when the government fails to adequately protect us, UE members must act together to win some relief and fairness. In the area of health insurance, our collective vigilance and militance are still going to be necessary.