UAW backs health care reform, cites $10B payoff program in email

Washington — The United Auto Workers are urging members to back Obama’s efforts in Washington to reform health care, citing a provision that includes $10 billion to defray the medial costs for union-owned companies/members and community organization groups such as ACORN.

The current health care bill, as approved by a House committee last month, includes Section 164, a reinsurance program for retirees. As Bloomberg news reports, the bill may offset health care concessions made the United Auto Workers as Ford, GM and Chrysler all cut costs during the recession:

The provision, embedded in legislation passed in July by House and Senate committees, may help offset health-care concessions made earlier this year by the United Auto Workers as part of a government rescue of General Motors Co. and Chrysler Group LLC and related cost-cutting at Ford Motor Co.

Company, municipal and union-sponsored plans that meet eligibility would be reimbursed for 80 percent of the health costs from $15,000 to $90,000 for early retirees ages 55 to 64, according to the legislative proposal.

“It’s probably going to cut a big chunk of costs,” said Jon Glaudemans, a senior vice president at Avalere Health LLC, a health-policy consulting firm in Washington, D.C. “At that age, you’re either using a very little or a lot of your coverage. I would expect a substantial amount of an employer’s costs comes between $15,000 and $90,000 in claims.”

Sec. 164 is also explained on this summary posted via Nancy Pelosi’s web site:

Sec. 164. Reinsurance program for retirees. Establishes a temporary reinsurance program to provide reimbursement to participating employment-based plans for part of the cost of providing health benefits to retirees (age 55-64) and their families. Employment-based plans must apply to participate and be approved by the Secretary. The program reimburses participating employment-based plans for 80% of the cost of benefits provided per enrollee in excess of $15,000 and below $90,000. The plans are required to use the funds to lower costs borne directly by participants and beneficiaries. The act appropriates $10 billion for this fund and those funds are available until expended.

According to the Detroit News, the provision outlined in Sec. 164 will be a boost corporations owned (or partly owned) by unions:

The provision could provide badly needed financial support to hourly retirees, who have agreed to accept stock in exchange for billions owed in retiree health care at General Motors Co. and Chrysler Group LLC. The UAW’s voluntary employee beneficiary association, or VEBA, owns a 55 percent stake in Chrysler in exchange for billions Chrysler owed in health benefits. The UAW GM VEBA received a 17.5 percent stake in GM in exchange for billions owed. It also received a warrant for 2.5 percent of GM stock and a note for $2.5 billion.

As part of the deal at Chrysler and GM, it eliminated hourly retiree dental and vision coverage and some prescription drugs for hourly retirees. Low-income retirees who previously had no co-pay must now make an $11 monthly co-payment.

But the congressional provision could also boost other groups, including steelworkers, municipal workers and others with similar health care associations.

UAW backs health care reform:

“We need meaningful health care reform if we are going to get our economy going again,” UAW President Ron Gettelfinger said in a statement posted on the union’s Web site Thursday. “Decent, affordable health care should be a right of every American, not a privilege.”

In addition, if any doubt existed that Sec. 164 would directly benefit the unions (language in the bill does not single unions out), an e-mail sent to UAW members removes all doubt. The email letter cites the provisions and benefits outlined in Sec. 164 (emphasis added):

UAW Letter:

Dear Brother and Sisters,

When Congress reconvenes in September, the stage will be set for a historic battle over health care reform.

The House is expected to take up legislation reported by three committees that would:

– Ensure that 97 percent of Americans have health insurance coverage.

– Provide subsidies to ensure that coverage is affordable for working families.

– Require employers to contribute to the cost of coverage.

– Guarantee individuals choice of health care plans and physicians.

– Prohibit insurance companies from denying coverage because of pre-existing conditions, or from charging exorbitant premiums to individuals who are sick or older.

– Establish a public plan option to provide competition for private insurance companies, thereby holding down costs.

– Lower health care costs by eliminating the hidden tax of “uncompensated care,” and by reforming the delivery of health care and provider payments.

– Provide assistance to employers and Voluntary Employee Beneficiary Associations (VEBAs) to help them continue coverage for early retirees.

– Improve Medicare’s prescription drug coverage for retirees.

– Pay for health care reform through progressive taxes, NOT by taxing workers’ health care benefits.

The Senate Committee on Health, Education, Labor and Pensions (HELP) has reported a bill similar to the House legislation. The UAW and a broad coalition of progressive organizations are strongly supporting the House health care reform bill and the bill reported by the Senate HELP Committee. These bills would provide enormous benefits to working families, including UAW members:

– Workers would no longer have to fear the loss of health care coverage if they are laid off or their employers go bankrupt.

– Coverage for retirees would be strengthened and made more secure.

– Individuals would be protected from discriminatory practices by insurance companies.

– Health care costs would be lowered significantly, so premiums, copays and deductibles do not continue to escalate faster than wages.

Not surprisingly, insurance companies and various right-wing groups are mounting a campaign to block health care reform. To counter their dishonest, disruptive scare tactics, UAW activists need to join with our progressive allies in sending a strong message to members of Congress that NOW is the time to pass genuine health care reform.

Please contact your representative and senators right away by calling: (877) 264-4226.

Urge representatives to vote for the House health care reform bill that has been reported by three committees. Tell senators to support the legislation reported by the HELP committee.

Thanks for your efforts on this critically important issue!