By Noam N. Levey
Los Angeles Times, December 17, 2019
Even as soaring insurance deductibles wreak financial havoc on millions of American families, some workers have managed to dodge the affordability crisis.
In Boston, a labor union representing the city’s hotel workers offers its members health coverage with no deductible and family premiums just a tenth of the U.S. average.
This year, workers pay just $16 a month for a single plan and $48 a month for a family plan.
Workers and their families pay nothing out-of-pocket for doctor visits, tests and hospital stays. Even the most expensive specialty drugs cost just $12 per prescription. Generics are $1.
The push by Unite Here, Local 26, to protect Boston hotel workers highlighted the challenges of protecting patients from medical bills, as workers were forced to make difficult choices. But the union’s success — in one of the most expensive healthcare markets in the country — also suggests that Americans may not have to settle for huge deductibles that have put medical care out of reach for millions.
Delivering that peace of mind wasn’t easy. Starting in 2013, when the new health plan debuted, Local 26, which provides coverage for roughly 9,000 union members and their families, had to confront the biggest cause of soaring insurance premiums and deductibles: the high price of U.S. medical care, particularly at hospitals.
It required union members to make a trade-off that many, at first, found unpalatable — giving up access to some of the city’s best known, and most expensive, hospitals.
Local 26, like many unions, had long offered members a health plan, which was largely funded by the hotels that employed its members. Such Taft-Hartley plans, as they are called, are prized by unions, as they typically offer good benefits and have preserved workers’ health protections, even when wages have stagnated.
But Local 26’s plan had a history of struggling, as rising medical costs sapped the plan’s reserves and jeopardized coverage for workers and their families, many of whom are immigrants from Latin America, Africa and East Asia.
In Boston, the 1994 merger of two of the city’s premier academic medical centers — Massachusetts General Hospital and Brigham and Women’s Hospital — created a powerhouse known as Partners HealthCare with unparalleled ability to demand high prices.
When Local 26 officials began their research, they were stunned to see that the Massachusetts General and Brigham and Women’s charged two or in some cases even three times as much as other academic medical centers in Boston.
So, Local 26 put the question to a vote: Should members get a narrower network of medical providers and guaranteed wage hikes? Or should they keep access to all Boston hospitals, but give up raises for 2 ½ years to keep the health plan from going bankrupt?
In the end, two-thirds of the membership backed the switch to the new, limited network plan.
It rolled out in late 2013. Workers got a raise the next year.
Just 2% of employers have eliminated hospitals or health systems from their insurance networks, as Local 26 did, according to a nationwide employer survey by the Kaiser Family Foundation.
By Don McCanne, M.D.
It is common to hear that many union members are opposed to Medicare for All because they do not want to give up their health plans (Taft-Hartley plans) gained through years of tough union negotiations. But these plans have required trade-offs, frequently forgoing wage increases. In this instance, the trade-off for Unite Here was agreeing to a narrower provider network, forgoing care at two of Boston’s premier academic medical centers – Massachusetts General Hospital and Brigham and Women’s Hospital (Partners).
As a result of this trade-off, what the workers do see is how small the premiums are that are deducted from their paychecks and how little their out-of-pocket cost sharing is. The trade-off of losing access to Partners hospitals seemed to be worth it. But what they do not see is the employers’ contributions to the plan premiums which are paid for through forgone wage increases.
The union members are losing in two ways. Their benefits are less comprehensive than the benefits included in the single payer model of Medicare for All, including network restrictions not found in Medicare for All. Also, since single payer is funded through progressive taxes, the modest incomes of Unite Here members would result in lower tax payments than they are now paying in forgone wages. It’s just that the difference is not visible to them so they don’t see that it is a much better deal for them – better benefits at a lower cost.
The keepers of the Taft-Hartley trust funds seem to have a disconnect in logic when they oppose single payer reform. They look at the pot of gold they manage, and they seem to think that it has much greater value than the credit appearing in federal balance sheets. Of course, the federal funds are guaranteed by our government whereas the union trust funds, as this article indicates, can have “a history of struggling,” and may not be as secure as they would be in the U.S. Treasury.
But there are individuals within the union movement who clearly understand the superior benefits of single payer Medicare for All who can explain it to the rest of them. Just ask the National Nurses United.
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