The New York Times
July 14, 2003
Health Costs Soaring, Automakers Are to Begin Labor Talks
By Danny Hakim
Health costs have been soaring for many employers. In other industries, businesses have generally passed along more and more of the costs to workers and retirees, if they maintain benefits at all. Not so in the auto industry, where union leaders have negotiated some of the most substantial medical benefits in the country for their members.
The Big Three and their major suppliers spend some $9,000 and up per active worker annually, according to Mercer Human Resource Consulting…
G.M.’s medical cost is equivalent to about $1,200 a car in this country.
The absence of a national health system in the United States means that the Big Three take on social responsibilities that the governments in Japan and Germany bear. Gary Lapidus, a Goldman, Sachs analyst, referred in his recent report to the Big Three as “H.M.O.’s with wheels” that only happen to make cars.
Uwe Reinhardt, a Princeton University health care economist, calls the Big Three “a social insurance system that sells cars to finance itself.”
“It’s insane to think that a company embedded in a fierce global competition can function as a social insurance system,” he said. “It is a crazy, anachronistic idea. It’s an idea that worked in the 60’s, but lost its validity beginning in the 70’s when the car market became global.”
Comment: Only the government has the capability of establishing an affordable, equitable, and universal system of social insurance.
For an explanation of why we must replace private health plans with a system of social insurance: https://pnhp.org/publications/private_health_plans_versus_social_insurance.php