Latest Solidarity Issue

Health Care

Is it true that UAW members never pay a penny for health care?

No. The package of health benefits available to UAW-represented workers in the auto industry includes a traditional Blue Cross Blue Shield insurance option. This plan does not pay for routine doctor’s office visits (although tests and laboratory costs associated with the visit may be covered). Surgical and hospital services are fully covered.

UAW members may also elect HMO or PPO health care options that require lower out-of-pocket expenses but limit the choice of health care providers. HMO plans typically require co-pays for doctor visits of about $10; PPO plans require a 30 percent to 50 percent co-pay for office visits.

Newly hired workers covered by UAW contracts at Chrysler, Ford and General Motors receive health care benefits after seven months on the job; they then may enroll in a traditional, HMO or PPO plan, depending on the availability of plan options in their area.

What types of health care benefits has the UAW negotiated for autoworkers?

Health care benefits for UAW active and retired members in the auto industry include comprehensive hospital, surgical, medical and prescription drug coverage. Other benefits such as dental, vision care, hearing aids and durable medical equipment are also provided.

In the 2003 contract negotiations a number of changes were made to the health care coverage to secure improved delivery system discounts, utilize a mail-order prescription drug program for certain drugs, and integrate medical and wellness programs for better prevention and management of chronic diseases.

Is it true that UAW members never pay a penny for health care?

No. The package of health benefits available to UAW-represented workers in the auto industry includes a traditional Blue Cross Blue Shield insurance option. This plan does not pay for routine doctor’s office visits (although tests and laboratory costs associated with the visit may be covered). Surgical and hospital services are fully covered.

UAW members may also elect HMO or PPO health care options that require lower out-of-pocket expenses but limit the choice of health care providers. HMO plans typically require co-pays for doctor visits of about $10; PPO plans require a 30 percent to 50 percent co-pay for office visits.

Newly hired workers covered by UAW contracts at Chrysler, Ford and General Motors receive health care benefits after seven months on the job; they then may enroll in a traditional, HMO or PPO plan, depending on the availability of plan options in their area.

What types of health care benefits has the UAW negotiated for autoworkers?

Health care benefits for UAW active and retired members in the auto industry include comprehensive hospital, surgical, medical and prescription drug coverage. Other benefits such as dental, vision care, hearing aids and durable medical equipment are also provided.

In the 2003 contract negotiations a number of changes were made to the health care coverage to secure improved delivery system discounts, utilize a mail-order prescription drug program for certain drugs, and integrate medical and wellness programs for better prevention and management of chronic diseases.

What changes in health care were made since 2003?

After an extensive review of the financial situations at GM and Ford in 2005, UAW active members agreed to divert a scheduled 3 percent wage increase and a portion of each quarterly COLA (cost of living adjustment) payout to a Voluntary Employee Beneficiary Association (VEBA) established at each of the companies. The VEBA trusts, which also received substantial contributions from the employers, will pay 80 percent of retirees’ monthly premium contributions and 50 percent of their deductibles.

In addition, UAW members at Ford and General Motors also accepted higher co-pays for some prescription drugs.

The mid-contract changes agreed to by UAW members have helped preserve health care benefits for UAW active and retired members, while yielding billions of dollars in cost savings for Ford and GM.

Is cost shifting the answer to escalating health care costs?

Cost shifting is frequently cited as a means to reduce utilization of health care, the idea being that if people have to pay more to go to the doctor, they will do so less often. This approach assumes that large numbers of people are visiting doctors and hospitals to demand unnecessary medical procedures, an assumption that flies in the face of available data and real life experience.

In fact, in any given year, a relatively small portion of a health plan’s population generates the majority of health care costs. Sick people should not be penalized for seeking the health care they need, nor should others be discouraged from seeking preventive services when appropriate.

Compared to 29 other countries of the Organization for Economic Cooperation and Development (OECD), Americans consume less and pay more out of pocket for health care services.7

Advocates of cost shifting assume that large numbers of people are visiting doctors and hospitals to demand unnecessary medical procedures. This is not supported by available data. The Department of Health and Human Services found that workers with employer-sponsored coverage paid 79 percent more for coverage between 1996 and 2003, and yet the cost of health care soared during that period.8

Can the problem of rising health care costs be solved at the bargaining table?

No. America’s health care crisis is a national problem that requires a national solution. It cannot be resolved with any one industry or employer through labor negotiations.

The United States is the only major industrialized nation in which the responsibility for providing health care rests primarily with employers. Other developed nations have universal health care systems – funded by general and employer tax revenues – that provide high-quality care at lower costs to all their citizens. In the United States, however, more than 46 million Americans are without any health care coverage at all, and millions more are underinsured.

The UAW has long advocated for a universal, single-payer insurance program to cover every man, woman and child in the United States. Such a program would not only ensure adequate medical care for all Americans while controlling costs, it would place U.S. companies on a more level playing field with overseas competitors that do not provide health care benefits.

 

7 OECD, 2004. Commonwealth Fund, May, 2007; Health Affairs, January/February 2007, Vol. 26, No. 1, “How different is the United States from the rest of the OECD?”

8 Kaiser Family Foundation, “Trends and Indicators in the Changing Health Care Marketplace,” Feb. 8, 2006