Grocery strike settlement is a death knell for employer-sponsored coverage
Los Angeles Times
February 27, 2004
Union, Stores Reach a Deal to End Strike
By James F. Peltz, Melinda Fulmer and Ronald D. White
Negotiators reached a deal Thursday night that could end the California supermarket strike and lockout, a bitter fight that highlighted the national
debate over how much companies should pay for workers’ healthcare coverage.
… in a victory for the supermarket companies’ bid to stem rising healthcare costs, their regular per-employee contributions to the healthcare program would be capped at a set dollar limit…
http://www.latimes.com/business/la-fi-upermain27feb27,1,2819295.story?coll=la-home-headlines
Comment: Although there will be considerable diversionary discussion about
the other issues, this strike and lockout was really about only one issue. Management wanted to change to a defined contribution program in order to
cap the companies’ health care costs. Future cost increases will be the responsibility of the employees. With continuing health care cost escalation, the financial burden will be unbearable for these employees who earn less than $30,000 per year.
The past decade has witnessed an unrelenting effort to shift the costs of employer-sponsored coverage to the employees. This settlement is a landmark,
pivotal point in the history of employer-sponsored coverage.
With the success in shifting low income employees into a defined contribution system, there is no doubt that higher income employees, who can currently afford the costs, also will be shifted rapidly into defined contribution programs. We can anticipate an accelerated growth in high-deductible, managed care PPO plans because of the lower premiums offered. Use of health savings accounts (HSAs) will increase, but they are not insurance. HSAs are merely a vehicle to subsidize the health care of wealthier individuals with taxpayer funds. We are witnessing the end of the era of employer-sponsored coverage.
The healthy and wealthy will continue to do fine in this health care environment. But both moderate and low income individuals who have significant health care needs will face financial disaster along with impaired access to care because of lack of affordability.
Actually, there is some good news in this disaster. This transformation of the health care system will be extremely unstable and intolerable. It cannot last long. It will become clear to all that we will need to shift our abundant health care resources into an equitable, affordable system of social insurance.
It remains to be seen how long we will tolerate a rapidly deteriorating system and how much suffering we have to witness before we adopt a system of social insurance.
The grocery workers stuck it out for nearly five months and then lost. Can we show the nation a much better option in the next five months? Taking longer will only increase the privation and suffering.