Local 412
Updated On: Jul 31, 2008
Friday, June 13, 2008


            WASHINGTON (PAI)--Efforts to reform the nation’s health care system should make it universal, comprehensive and affordable without undermining the better aspects of the present employer-based health care system, the AFL-CIO says.

            Speaking for the federation in early June in one of a series of Senate Finance Committee hearings on the state of U.S. health care, federation Executive Vice President Arlene Holt-Baker reminded lawmakers the present employer-based system covers the majority of U.S. residents.

            And while she advocated the solution the federation backs--a mixed private-public system with government as the strong regulator of private health care costs and the health insurer for those who cannot get private insurance--Hilt-Baker said the present system should not be arbitrarily junked.

            “As we work toward lowering costs and covering everyone, we must be sure reforms do not undermine employer coverage, which is the backbone of our health care system and covers 160 million Americans.  That is because employer-based coverage has significant advantages,” Holt-Baker said.

            Holt-Baker spoke to the Finance panel, a key player in writing health care legislation, spoke just days before backers of fully government-run universal health care took the House floor for a late-night session on C-SPAN advocating that plan.  Their measure, HR 676, now has the support of more than 300 separate union organizations, with the latest being the Michigan AFL-CIO.

            The committee will not tackle health care legislation this year, but its hearings are laying the groundwork by gathering evidence--and opinions--in anticipation of legislation next year to change the nation’s creaky, expensive, insurer-run health care system.

            Holt-Baker also spoke as health care continues to be a key topic on the presidential campaign trail.  There, prospective Democratic nominee Sen. Barack Obama (D-Ill.) has proposed universal care for kids, controlling costs, using government leverage to cut premiums to make coverage more affordable and available, and having government be the insurer of last resort.

            Sen. John McCain (R-Ariz.), the prospective GOP presidential nominee, would have individuals venture into the insurance market to buy coverage for themselves, armed with a $5,000 after-the-fact tax credit to cover premium payments.  He also would tax employer-provided health insurance.   The AFL-CIO calls his plan a continuation of anti-worker GOP President George W. Bush’s “you’re on your own” health care policies.

            Holt-Baker laid out several advantages of the present employer-based health care system: “It provides a natural pooling mechanism and has lower administrative costs when compared with coverage in the individual market: 10% of premiums for group coverage versus 25% to 40% individual market coverage.

            “And because there is no individual underwriting in employer plans, workers are not excluded from coverage due to age or health status and premiums are more in line with actual medical expenditures than they are in the individual market,” she testified.
            “Furthermore, both employees and employers highly value employer-based coverage.  Surveys show workers value health benefits more than any other non-wage benefit.  Another survey asked workers in employer plans if they would prefer to continue receiving health benefits through their job or receive an increase in taxable income equal to the average premium instead.  Three quarters said they would prefer to continue receiving employer sponsored health insurance.”

            Holt-Baker admitted the present system has flaws, notably increasing costs which eat into or wipe out workers’ pay increases.  She told senators health care has been the #1 issue in bargaining for the last several years, and that many times workers sacrifice raises to keep their health care cost increases down.

            Finance Committee member Orrin Hatch (R-Utah) tried to get Holt-Baker--and other witnesses--to commit to a particular health care “reform” plan, but she declined.  Another witness, Felicia Fields of Ford Motor Co., also refused to commit to a comprehensive reform--even though she said Ford is now at a competitive disadvantage by paying $1,000 per vehicle to cover its workers’ and retirees’ health care.  Pending court and regulatory approval of the plan the two sides worked out, the UAW will take over Ford retirees’ health insurance on Jan.1, 2010, she said.

            The AFL-CIO has established a high-level 16-person committee which is evaluating all the “reform” plans now being floated, judging each according to the principles the federation has laid down: Affordability, universality, letting patients choose their own doctors,  cost controls and having the federal government provide insurance--like Medicare--for those who cannot get it otherwise.  ###

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