Problems and Challenges in the New Healthcare Act

I think the writing is on the wall--come a few years all hell will break lose.

"The legislation sets
a threshold in 2014 that, only after you pay more than 9.5 percent of your
income for health insurance do you qualify for a “premium tax credit”. "


Problems and Challenges in the New Healthcare Act

by Peter Knowlton, President, UE Northeast Region

(Published in the May 2010 edition of the UE News. UE is the
abbreviation for the United Electrical, Radio, and Machine Workers of
America.)

UE locals bargaining for their members’ healthcare will get little help
from the Health Care and Education Reconciliation Act (HCERA) passed by
Congress and signed by the president. While millions of uninsured will
gain access to coverage, and for the first time the U.S. government will
prohibit health insurance companies to deny coverage because of
pre-existing conditions, there are harmful aspects to the new law. Much as
NAFTA legitimized cross-border corporate exploitation of workers, HCERA
confirms the domination of healthcare in the U.S. by private health
insurance corporations, whose own maximum profit remains their overriding
priority.

The new law endorses the insurance industry and employer push for
high-deductible plans, health savings accounts and flexible spending
accounts. Such schemes require working people to pay the first several
thousand dollars of health service costs out of pocket before the insurer
pays a dime.

HCERA also subtly sets the dangerous benchmark that 10 percent or more of
your income should go toward the cost of healthcare. The legislation sets
a threshold in 2014 that, only after you pay more than 9.5 percent of your
income for health insurance do you qualify for a “premium tax credit”. In
2013 the legislation increases the threshold for the itemized deduction
for unreimbursed medical expenses on your income tax return from the
present 7.5 percent of adjusted gross income, to 10 percent of adjusted
gross income.

The private health insurance industry will not only survive, but thrive,
under this legislation which mandates everyone not covered by an employer
plan to purchase health insurance. In my home state of Massachusetts,
where the state legislated an individual mandate in 2006, we have the
highest private insurance premium rates in the country.

An extremely troubling provision of HCERA says that, starting in 2014, an
employer with 50 or more full-time employees will pay a $2,000 per
employee penalty for not providing affordable health insurance. That could
be the beginning of the end for employer-provided healthcare. It is hard
to imagine that employers won’t notice that the fine for not providing
insurance is a lot lower than the cost of premiums to insure employers.
It’s not clear what will happen to those workers who lose coverage.

The so-called “Cadillac” tax will be imposed on plans that would have been
considered “Chevys” just a few years ago. Most workers’ health plans have
not gotten better or more luxurious – they’ve just gotten a lot more
expensive. That’s not the workers’ fault, and the rise in overall premium
costs is not really our employers’ fault either. It is the insurance
companies, along with the pharmaceutical industry and big hospitals, that
have made good health coverage so expensive that it seems like a luxury.
But starting in 2018 HCERA levies a tax penalty on decent health insurance
plans above a certain dollar limit – another subtle and dangerous message
that there should be a financially penalty for having decent healthcare.
In my part of the country, the Northeast, many employers’ health premiums
are already high enough to qualify for the tax penalty.

The conversion of our health insurance system from managed care (HMOs) to
high deductible plans and health savings accounts will continue to harm
workers forced to make higher and higher up-front payments when they or
their children need care. In the last four years the number of companies
offering high-deductible plans has nearly tripled, from 4 to 10 percent in
2005, to 11 to 28 percent in 2009.

Healthcare reform did not have to turn out this way. The organization
Physicians for a National Health Plan (PNHP) says that, with a payroll tax
of just 3 to 5 percent, we could have a medicare-for-all single payer
system that would cover every U.S. resident, and put an end to deductible,
co-pays, and the insurance companies’ controlling our healthcare system.
Employers would also have to contribute 6 to 8 percent of their total
payroll to finance such a plan, but that is a lot less than the 20 to 30
percent of payrolls that they now hand over to the private insurance
companies in the form of premiums.

The bill approved by Congress and the White House does some good, but will
also cause us many problems. But because we are organized, we are not
powerless. UE locals have the ability to shape how much we pay for health
insurance. Whether we have a fee-for-service plan, an HMO, PPO, or HSA, we
can fight to set limits on what our members pay for healthcare each year.
Keeping our health insurance affordable, while it’s controlled by
profit-driven insurance corporations, will continue to be very difficult,
but with membership involvement and action we will find ways to make
healthcare more affordable and accessible to our members, regardless of
their health condition.

As is so often the case, when the government fails to adequately protect
us, UE members must act together to win some relief and fairness. In the
area of health insurance, our collective vigilance and militance are still
going to be necessary.

Distributed by:

Kay Tillow
All Unions Committee For Single Payer Health Care--HR 676
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551
Email: nursenpo@aol.com

http://unionsforsinglepayerHR676.org

05/06/10