Romney, Obama Health Care Reforms Offer No Relief for Unions

When union members were encouraged to support the health care bills passed in Massachusetts in 2006 and by Congress last year, they were told there’d be less health care cost-shifting from employers onto employees.

Unfortunately, President Obama’s Patient Protection and Affordable Care Act has the same bipartisan flaws as the Massachusetts plan it was modeled after, the brainchild of then-Governor Mitt Romney, a Republican.

Both plans created a greatly enlarged (and publicly subsidized) market for private insurers—whose role remains costly, wasteful, and completely unnecessary, not to mention detrimental to controlling costs.


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Both Romneycare and Obamacare require individuals to buy insurance, backed up by the threat of fines, while imposing minimal financial burdens on employers.

Management continues to set the terms of medical coverage for most workers, unilaterally if non-union, and subject to negotiations if not. Employers remain free to offer unaffordable insurance or to drop coverage, with little penalty.

One test case in the private sector is underway. Contract bargaining at telecom giant Verizon kicked off today in New York, as hundreds of members of the Communications Workers (CWA) rallied outside company headquarters to demand that management pull back from plans to saddle them with the rising cost of health care.

CADILLAC DEMONS

During the debate in Congress last year, Obama and leading Democrats demonized the “Cadillac coverage” negotiated by unions on the grounds that it encourages over-use of medical services. So Congress created a 40 percent excise tax, starting in 2018, that will apply to more expensive plans.

“Instead of setting a new, higher standard,” noted labor journalist Roger Bybee, the law “effectively serves to reinforce a new lower standard of ‘acceptable’ coverage.”

Organized labor tried, but failed, to get this tax eliminated. Instead, it was only postponed and the threshold amounts were raised.

Pro-labor health care experts warned that the tax would give employers an even greater incentive to curtail benefits and shift costs to millions of workers, as they attempt to keep premiums below the tax threshold—$27,500 a year for family coverage.

Most unions, including our own—the CWA—downplayed the future consequences of the bill, which labor supported despite the excise tax.

In a January 2010 message to local officers, CWA emphasized that delaying the tax would “give us one, and in some cases, more than one round of bargaining to address the impact on our members.”

It was always unclear how the union proposed to “address the impact.” There’s no chance of repealing the excise tax in this Congress, and short of a universal public health care system, the only “solution” for employers is to chisel away at existing health benefits.

There is little evidence, based on our experience in Massachusetts, that individual mandates and insurance market restructuring are going to make bargaining for benefits any easier, in either the private or public sector.

Three Harvard Medical School researchers found in 2009 that the price of subsidized state plans set up by Romney’s “Commonwealth Care” grew by 9.4 percent, significantly outpacing inflation and wages. The plans avoided even higher costs by shifting charges onto patients and starving resources for hospitals that care for the state’s remaining 5 percent uninsured.

THEY CAN’T WAIT

With lots of bipartisan political help at the state level and the federal, management isn’t waiting for 2018. They want to scale back benefits now.

In New Jersey, Republican Governor Chris Christie is leading the charge to take health care cost-sharing decisions off the negotiating table for public employees—and enable his administration to impose costly medical plan changes unilaterally.

Legislation shifting $3 billion in health care costs to workers over a decade (and stripping their right to bargain in the future) advanced this week over vigorous protests from CWA, which represents state and municipal workers in New Jersey.

In Massachusetts, with active encouragement from Democratic Governor Deval Patrick, both houses of the Democrat-controlled legislature just passed bills to restrict benefit bargaining by municipal employees.

In contract talks with CWA, the United Electrical Workers (UE), and other unions, giant firms like General Electric and Verizon are seeking their own givebacks. Hugely profitable GE has already imposed a plan that burdens its salaried employees with sky-high deductibles and co-pays.

At Verizon, workers have struck repeatedly and successfully to fend off similar cost shifting over the last 25 years.

But once Verizon’s prime competitor, AT&T, breached the premium-sharing wall, in 2009 bargaining with 100,000 CWA members in its landline division, Verizon management wanted equal treatment. The 40,000-member Verizon regional bargaining unit that extends from Massachusetts to Virginia faces a showdown over health cost hikes in talks with an August 7 deadline.

LINKING THE ISSUES

In past Verizon (or NYNEX and Bell Atlantic) contract campaigns since 1989, CWA and Electrical Worker (IBEW) activists used their high-profile struggles to educate and mobilize members, plus appeal to the public, about the need for Medicare for All, an expanded system of social insurance that covers everyone.

Activists with the national Labor Campaign for Single Payer group reported at their gathering last month in Maryland that some unions are still linking the two issues—but more should be doing so, particularly in the public sector.

In states where organized labor is still strong, single-payer initiatives could be pushed at the state level, like the enabling legislation that was passed in Vermont this spring. California offers another opportunity to push for the single-payer solution that takes health care off the bargaining table permanently. Some unions there, including the California Nurses Association, have prepared a multi-year strategy for that goal.

Unfortunately, the AT&T premium-sharing pattern, defeatism among some CWA officials, and their capitulation to the constraints of Obamacare are threatening to lower members’ expectations just when they need to be raised.

Telephone workers in the Northeast have shown enormous political courage and mobilization capacity in the past. The CWA-IBEW tradition of fighting for health care for all—while resisting health cuts sought by management—should not be abandoned now, when that approach makes more sense than ever before.



Don Trementozzi is president of CWA Local 1400, a member of the union’s Verizon regional bargaining committee, and a candidate for CWA national secretary-treasurer. Steve Early is a former CWA international representative in Boston and author of The Civil Wars in U.S. Labor, which reports on recent health care and labor law reform activity.

A version of this article appeared in Labor Notes #388, July 2011. Don't miss an issue, subscribe today.