6.03.2003

Background on June 5 Health Care Action Day
Resisting cuts in benefits and services can help build a movement for real health care reform

One of the biggest problems facing workers and employers is double-digit increases in the cost of health insurance premiums.

These spiraling costs have nearly all employers demanding that employees take pay cuts for some or all of the increases. Many employers are also raising co-pays and deductibles to cover the increases and discourage members from using their plans.

At the same time that employers are trying to cut benefits, massive cuts in both public and private services are affecting the quality of care, especially for those that need it most. Working people are paying more – in taxes, fees, co-pays, deductibles and premiums – while getting less care and lower quality services.

That's why on June 5 more than 30 union and community groups have signed up to participate in Health Care Action Day. On that day, each participating organization will encourage their 70,000-plus members across Massachusetts to take a stand against cuts in their health care benefits or services. Wearing a simple sticker (pictured above) will send a message to management: "You can't stem rising health care costs by shifting the burden to workers and retirees."

Background on the crisis
In the vast majority of workplaces that are non-union, the burden of medical cost inflation gets shifted from management to workers unilaterally, causing financial pain for wage earners, but little muss or fuss for their employers. Payroll deductions for premium contributions and out-of-pocket payments for treatment are increased whether workers like it or not, because without a union, workers lack any say in the matter.

For the few workers lucky enough to be united in a union, bargaining with employers over this issue has become as difficult as it was during the late 1980s and early 1990s, when insurance premiums rose by similar amounts.

In the last 18 months, state workers, school teachers, janitors, manufacturing workers, food processors, and truck builders have all been involved in health care-related strikes or lock-outs. The most high-profile dispute was when 18,000 employees of General Electric walked out for two days last January over that company's decision to unilaterally raise premiums. Later this summer, major regional or national contracts in the telephone and auto industries are also up for renegotiation. If management tries to reduce employer-paid coverage for the hundreds of thousands of workers and retirees at GE, GM, Chrysler, Ford, Verizon, and Quest, even bigger confrontations lie ahead.

The link to health care reform
How workers respond to this bargaining challenge has important implications for the future of health care reform. The actions of organized labor – on the job, at the negotiating table, and, where necessary, on the picket line – can become a popular rallying point for people ill-served by our current system of private, job-based medical benefits. The struggle over "who pays" for health care is also an opportunity for unions to show leadership to the non-union majority of working people.

Showing strong resistance to cuts in benefits and services motivates politically powerful employers to support reforms that would lead to a publicly-financed health care plan that covered everyone and had the clout to control costs by reducing bureaucratic waste and inefficiency. However, if workers don't link their resistance with the fight for broad health care reforms that will benefit everyone, we risk being seen as part of the problem. By resisting health care contract concessions with a broad demand for "health care for all," union members can help create pressure for a political solution to the problem now confronting millions: how to secure and maintain access to affordable care.

In the 1990s, most firms (and many union-sponsored health and welfare funds) resorted to a quick fix called "managed care" which included cost saving limits on employees' choice of doctors, hospitals, or treatment options. Now managed care is no longer able to restrain health care costs and premium increases are expected to average 15 percent this year. Once again, management wants labor to foot the bill or get by with fewer benefits.

Thousands of retirees who thought they had health care coverage for the rest of their lives have since lost that coverage, particularly among companies who blame such "legacy costs" for landing them in or near Chapter 11. Twenty-five years ago, more than 80 percent of all medium- and large-sized firms offered medical benefits to their pensioners. Now only 40 percent do – and one-fifth of those firms have eliminated such benefits for new hires. More than 2 million seniors have also recently been tossed out of their HMO plans.

The political challenge facing union members today is how to broaden the defense of negotiated benefits, for both active and retired workers, when a record number of Americans – as many as 75 million at some point during the last two years – have no coverage at all.

Health Care Action Day is a way for union members, retirees, and health care reform supporters to help frame the struggle against cost shifting broadly, so that it won't be viewed as just another special interest fight against give-backs by workers who already enjoy better-than-average coverage. By linking our resistance to larger political demands (i.e. "Health Care for All... Not cuts in benefits or services"), the fight against concessions has the potential for attracting broad community support and building a powerful movement for real health care reform.