‘HEALTH INSURANCE ATE MY PENSION’
What some unions are doing about out-of-control health care costs
By DON McINTOSH
Associate Editor
After decades of rising health costs,
American workers are used to rising
health insurance premiums and wors-
ening coverage, and watching as raises
are gobbled up by health care cost in-
creases. And the question of who will
pay for the increases — workers or em-
ployers — is the number one source of
conflict in union contract bargaining.
At Boeing, it was a factor in the last
two strikes. At TriMet, new hires will
have 401(k)s instead of a traditional
pension because of rising health costs:
In July, an arbitrator said he imposed
the employer’s contract proposal
(which included the pension change)
because the union’s contract proposal
would have continued the same health
benefits and thus would have been too
costly.
Health insurance premiums have
doubled in a decade, according to a na-
tionwide annual employer survey —
from $7,061 for employer-sponsored
family coverage in 2001 to $15,073 in
2011. And employee-only coverage
now averages $5,429 a year. Under
President Obama’s Affordable Health
Care Act, premiums will be disclosed
on every worker’s W-2 form, but they’re
expected to continue to rise.
America spent 17.9 percent of its
Gross Domestic Product on health care
in 2010 — $2.6 trillion. That’s $8,402
per person per year, and double what
Canada spends.
To combat metastasizing cost in-
creases, unions and employers around
the country are looking at ways to im-
prove health and/or eliminate costly ad-
ministration.
In New York City, a health trust
jointly run by a hotel employers associ-
ation and the New York Hotel Trades
Council is saving a bundle by employ-
ing doctors directly, and cutting out the
insurance middleman. The trust oper-
ates four health centers and employs
200 physicians, 50 dentists, 24 pharma-
cists and 700 other medical support
staff to serve hotel workers and their de-
pendents — 86,000 people in all. The
$315 million annual cost is completely
funded through contributions from ap-
proximately 300 participating hotel em-
ployers at a collectively bargained con-
tribution rate of 22.5 percent of gross
wages. And in the most recent master
contract, the employer group commit-
ted to replacing an aging Brooklyn
health center with a new 100,000 square
foot state-of-the-art health center, which
Dr. Robert H. Greenspan, the health
network CEO, estimates will cost
around $60 million. That may sound
like a lot of money, but the cost to the
trust for health care works out to be
$358.79 a month for a single member
and $986.52 for a family. And that’s
about a third the cost of an equivalent
HMO, Greenspan said in an e-mail.
The strategy of cutting out insurance
middlemen may be spreading: Service
Employees International Union (SEIU),
which long had a clinic for its janitor
members in Chicago, recently opened
one for janitors in Houston. And a
group called the Freelancers Union is
opening a clinic in Brooklyn, New
York, this winter for its members.
A more common approach is to try
to encourage employees to become
healthier — quitting smoking or losing
weight. Pepsi charges employees $50 a
month if they smoke or have obesity-re-
lated medical problems — if they refuse
to attend smoking cessation or weight
loss classes — though Teamsters in up-
state New York are fighting aspects of
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