Now that the Affordable Care Act has been blessed by the Supreme Court, will it help us at the bargaining table? Probably not.
Much as NAFTA legitimized cross-border corporate exploitation of workers, the Affordable Care Act confirms the domination of health care in the U.S. by private insurance corporations.
The ACA has some well-known up-sides, such as no more pre-existing condition exclusions, covering dependents to age 26, and millions more poor people receiving health insurance.
But it does nothing to slow the push from the insurance industry and employers to put everyone in a high-deductible plan that requires working people to pay several thousand dollars out of pocket before the insurer pays a dime.
According to the Kaiser Family Foundation, 10 percent of workers in 2006 were covered by high-deductible plans of at least $1,000. By last year, 31 percent were.
WHAT THE NEW LAW WILL DO
Beginning in 2013 the health insurance industry will be paying an additional tax to support the ACA—a cost it will try to pass on to us via steeper premiums.
The law sets the dangerous benchmark that 9.5 to 10 percent of your income is a reasonable price to pay for health care. In 2013, the legislation increases the threshold for deducting medical expenses on your income tax return from the present 7.5 percent of adjusted gross income to 10 percent.
Then in 2014, everyone will be required to have health insurance, but you can get tax credits and other subsidies to help pay for it—unless your employer provides “affordable” coverage, defined as 9.5 percent of the worker’s household income. A household making $40,000 a year could shell out $3,800 a year for insurance and still be ineligible for any subsidies.
Even worse, the IRS says only the cost of covering the worker herself goes into the calculation—not the cost of covering the whole family. Lower-income families will find themselves unable to afford family coverage but also ineligible for the ACA’s subsidies.
WHY NOT OPT OUT?
Another troubling provision of the ACA says that, starting in 2014, an employer of 50 or more full-time employees who doesn’t provide affordable health insurance will pay a $2,000-per-employee penalty. It’s hard to imagine employers won’t notice that the fine is a parking ticket compared to the cost of premiums, and get rid of the benefit.
The Supreme Court upheld the ACA’s “individual mandate,” too, imposing a penalty of more than $1,000 if you don’t buy private health insurance.
In Massachusetts, the mother of ACA (we called it “Romneycare”), we’ve had the same sort of provision since 2006. We now have some of the highest private insurance premiums in the country.
The “insurance exchanges” also begin in 2014—for those states that opt in. The idea is to “promote competition through transparency” about the cost of insurance, but the Massachusetts exchange, for five years now, has done zilch to silence that giant sucking sound, out of our pockets and into theirs.
Starting in 2018 ACA levies a tax penalty on so-called “Cadillac” health insurance plans (really just Chevys), which creates financial disincentives to employers to offer good health plans.
In the Northeast, many health premiums are already high enough to qualify for the tax. Employers like Verizon are using the looming tax to try to shift costs and reduce benefits.
In 2014 employers will be able to increase the “employee rewards” offered to those in wellness programs, up to 30 percent of the employer’s cost of coverage. Government officials may raise that amount to 50 percent.
This “wellness” provision could be a Trojan horse (see Getting Healthy at Work). Employers may assess a surcharge—again, up to 30 percent—on employees who don’t participate. The law does include some protections designed to keep employers from penalizing those who don’t meet employer-set benchmarks, such as cholesterol numbers or quitting smoking.
More than 90 percent of Connecticut state employees have enrolled in a Health Enhancement Program that warns, “Unless you enroll, your premiums will be $100 per month higher,” in addition to higher deductibles.
MAKE IT EDUCATIONAL, TOO
Given this list of problems the ACA will soon create, what are unions to do? Thus far, labor’s strategy for health care at the bargaining table continues to be divorced from the political solution.
We have to say more than just “no” when the boss complains about the cost of insurance, especially when it is a public sector employer or a small business that doesn’t have the resources to fork over another annual salary just to pay the family premium.
We would do well to heed the history of civil rights movements: militant nonviolent civil resistance with clear demands produce big gains. Our fight is for “Medicare for all.” We have to make this a struggle not just to preserve our paychecks (short-term goal) but to change how everyone gets health coverage (long-term goal).
Talk about solutions, and get members thinking about Medicare for all.
Demand that all employees pay a percentage of their income for health insurance instead of a percentage of the premium. (This demand might have to revert to just bargaining unit members, since we can’t legally insist on bargaining management’s conditions.)
Survey members to discover the average annual health care costs members are paying now, and then figure out the percentage of their income. The percentage difference between workers and management is huge and dramatically shows the discrimination hourly workers face. It is not unusual for members to be paying 15-20 percent of their pay for health care and management to be in the 3-5 percent range—or less.
Peg your demand at 3 percent or lower, which for a worker making $20 an hour would equal $1,248 a year. For the vast majority of workers this would lower our costs.
Most members won’t be familiar with the concept of paying for insurance based on income, so take time for the discussion. When members embrace this idea, it can dramatically change the landscape of how you agitate about health insurance.
Make lots of information requests. If the employer wants us to pay more, then we should demand full transparency: health insurance claims and income details, insurance company financials, all employees’ insurance plans and how much they cost compared to salaries. Get the information that makes transparent the true costs of health care.
Take the picket line to the state Capitol if your shop goes on strike over health insurance. Let the public know about the work stoppage and lobby your representatives about Medicare for all.
Don’t let employers off the hook, if they claim they can’t afford to pay but won’t support the most cost-effective solution just because it would be publicly administered. Challenge their support for this free-market fiasco.
Prepare a letter for the employer to sign, stating support for Medicare for all—the solution that will save any employer huge amounts of money. When management refuses, it becomes another educational tool about how far employers will go to maintain the market system they want us to pay for.
Peter Knowlton is president of the United Electrical Workers Northeast region. To download detailed surveys, costing-out guides, and other aids to bargaining and educating members, go to www.uenortheast.org. Click on “UE Documents” and “Bargaining for Health Insurance.”