Thursday, June 25, 2015
This is a 2-part series that examines the role of multi-employer health care plans versus single-payer health insurance.
Anne Scheetz, MD, is a member of Physicians for a National Health Program and a founding member of the Illinois Single-Payer Coalition. Hale Landes is a member of IBEW Local 134 and the Illinois Single-Payer Coalition.
Multi-employer or Taft-Hartley plans — a “made-in-America” source of health coverage and other benefits for more than 20 million U.S. workers, retirees, and their families — are under serious threat.
The threat has two sources: the Affordable Care Act (ACA), and the fragmented, for-profit nature of the U.S. health care system, which the ACA re-enforced, rather than corrected.
Some union leaders held up the multi-employer plans as a good model for health system reform. In contrast to private for-profit health insurance companies, the plans, by law, serve their members, not passive investors.
They are more efficient than the insurance companies, devoting less than 10 percent of their outlay to administrative expenses (and more than 90 percent to health care), as opposed to the insurance companies’ 15 to 20 percent.
They tend to have high actuarial value, covering on average 87 percent of enrolles’ health care expenses, as compared to 90 percent for the platinum plans (which most people cannot afford) offered on the insurance exchanges, and 60 percent for the bronze plans.
Needless to say, this recommendation was not adopted. On the contrary, the ACA not only left the for-profit insurance companies in charge of health care, but created new disadvantages for multi-employer plans.
Perhaps most importantly, the ACA does not allow low-income workers who are enrolled in multi-employer plans to qualify for the government subsidies that are available to low-income people who buy insurance from for-profit insurance companies on the insurance exchanges.
Multi-employer plans are nonetheless taxed to pay for the subsidies, just like the insurance companies whose customers can benefit from them.
The ACA presents numerous other challenges to multi-employer plans as well, such as the unfunded mandate to cover children up to age 26; and administrative burdens whose costs will shift money away from health care.
Still other challenges apply to all workers. Penalties for companies that don’t offer health insurance are much less than the cost of insurance, do not apply to those that employ less than 50 workers, and do not apply to part-time workers. Employers are responding by cutting the number of employees, cutting hours, and sending employees to the insurance exchanges, among other practices that harm workers and their families.
The so-called Cadillac tax, which penalizes plans with high premiums, or, in the case of the multi-employer plans, high benefit payments, will also hurt the plans, and will most hurt those plans with a large number of older and sicker enrollees.
The National Coordinating Committee for Multi-employer Plans and many unions have responded to the problems posed by the ACA by lobbying for various amendments, and a few have called for its repeal.
Yet, the plans face serious challenges — even without the ACA.
Costs throughout the health care system are escalating. The consolidation of hospitals and physician practices allows providers to drive up prices. Prices for specialty drugs are rising almost 20 times as fast as prices for conventional drugs, and the prices of even some old and standard drugs are increasing faster than the rate of inflation. Administrative costs are increasing — for the whole system, they now total at least $350 billion per year.
The question of who will pay these increasing costs — employers or workers — has become a frequent cause of contract disputes. At best, workers have sacrificed wage increases to pay for health care, and this trend will continue.
The increasing costs are a significant challenge to worker solidarity. Some workers are denied equal benefits based on hours of work or length of employment, weakening union strength just as it is most needed. As is happening throughout the health care system, the funds are shifting more costs to their enrollees through co-pays for some services, a policy that penalizes the sick and burdens most those earning the lowest pay.
Amending the ACA — a very difficult task, given its complexity, will not solve these problems. Even a health reform modeled on the multi-employer plans would not solve these problems.
The solution is a single-payer health care system, also called expanded and improved Medicare for all. This reform proposal is the only proposal to address all of the problems faced by the multi-employer plans and all workers.
Under a single-payer program, everyone is covered for all medical care with the single payer being the government. Its administrative simplicity is the principal source of cost containment (traditional Medicare’s administrative overhead is only 2 percent). Insurance company marketing, underwriting, profits, and outrageous executive compensation would be eliminated. Furthermore, since everyone would be in the same system, the single payer would also be the single buyer of drugs, medical equipment, and services, thus able to enforce reasonable prices.
Financing would be by a progressive tax. Those who have the most would pay the most, while everyone would receive the care they need when they need it.
In contrast to the current situation, which workers are pitted against each other, under a single-payer system, we will all have an interest in making that system better. A single-payer system promotes rather than undermines, social solidarity.
Other benefits include free choice of providers, instead of the narrow networks that are now commonplace; no interruptions in coverage due to job changes, illness, or retirement; and a much more just workers’ compensation system.
A single-payer health care system is the only way to take health benefits off the bargaining table, leaving unions free to bargain over wages and working conditions.
Union support for a single-payer health care system is strong, although not yet universal. The website of Unions for Single Payer Health Care lists more than 600 labor groups that have endorsed the national single-payer bill, HR 676, the Expanded and Improved Medicare for All Ac,t whose chief sponsor is John Conyers of Michigan. The groups include more than 150 central labor councils from around the country; and 25 groups, including three labor councils, from Illinois.
Fifteen major unions and other labor groups support the Labor Campaign for Single-Payer, which works more on the state level. These include National Nurses United (NNU) for whom a single-payer health care system is an essential aspect of nurses’ professional obligation to advocate for their patients; Young Workers; the National Education Association (NEA); United Electrical, Radio, and Machine Workers (UE); and the Coalition of Labor Union Women (CLUW), among others.
At the 2014 AFL-CIO Convention, delegates affirmed their support for a single-payer system; and activists with the Labor Campaign challenged organized labor to “finish the job” of health care reform by making health care a human right.
On July 30 of this year, NNU will lead the celebration of Medicare’s 50th anniversary with the message: “Medicare – as American as apple PIE: Protect, Improve, Expand.”
Illinois’s single-payer bill, the Illinois Universal Health Care Act, currently HB 108, has been introduced in each General Assembly since 2007 by chief sponsor Mary Flowers of Chicago. Although it will not pass in the near future, it articulates the vision of the single-payer movement for the people of Illinois and the U.S., and serves as an educational and organizing tool. The Illinois Single-Payer Coalition and its Labor Outreach Committee work with local labor groups, as well as the national organizations toward a future guarantee for all people of access to all necessary health care, and of financial protection in the case of illness or injury.
Labor is surely the sector that can best lead the way to the solidarity expressed in the single-payer movement’s slogans: “Everybody in, nobody out,” and “One nation, one health plan.”
