UAW looks to influence debate on health care
UAW looks to influence debate on health care
National reform could be key to paying retirees’ bills
December 24, 2007
WASHINGTON — The UAW’s gamble that it can manage the health care costs of up to 700,000 people comes with a side wager over how much the union can boost its influence in the health care debate in Washington.
That debate will be key to whether the union can contain health care costs enough to keep its $52-billion fund for retiree health care solvent. And the union’s deal with Detroit’s automakers includes a boost to its lobbying efforts though a $30-million pledge toward a new think tank called the National Institute for Health Care Reform.
While the sheer scope of the UAW’s health care plan will make it one of the largest buyers of health care in the United States, experts say its sway over future health care reform may hinge more on which party wins the White House in 2008.
The UAW’s new role as health care shopper is "a very interesting development, and it has some potential for getting a handle on costs," said Bill Vaughan, senior policy analyst for Consumers Union in Washington.
Health care reform has been a key part of the UAW’s political goals for decades. In 1968, the UAW’s then-president, Walter Reuther, set up the Committee for National Health Insurance, denouncing what he called a "disorganized, disjointed, antiquated, obsolete nonsystem" of health care that left tens of millions of people without health insurance.
During the 1970s, the committee helped write several bills to expand insurance coverage, when presidents Richard Nixon and Gerald Ford supported the idea of national health care plans. But those bills failed to get through Congress, and the committee sharply cut back its efforts after Ronald Reagan’s election in 1980.
The UAW still supports some form of a national health care system and backed the Clinton administration’s efforts in 1994. But with the second Bush administration steadfastly opposed to any such move, the UAW has focused its lobbying on other health care problems, such as controlling costs, expanding Medicare and seeking government aid for automakers’ retiree health-care costs.
In many of those topics, the UAW found itself lobbying against insurance and drug companies and other powerful corporate interests. But with the union set to assume control of the health care costs for 540,000 retirees and their families, and 180,000 active workers when they retire, the UAW will become one of the largest buyers of health care in the nation, behind the federal government and the California Public Employees’ Retirement System.
"I think people will be sitting up and taking notice," said UAW chief lobbyist Alan Reuther, a nephew of Walter Reuther. "It doesn’t alter the fact that we still need fundamental reform."
Reuther said the UAW is still in the process of setting up the new National Institute for Health Care Reform, but that the retiree health care trust fund would not change its political priorities. He said the trust fund — technically a voluntary employee beneficiary association or VEBA — could let the UAW experiment with ways to contain costs, such as a program with General Motors Corp. that allows doctors to use electronic prescription forms to reduce drug interactions.
The VEBA is expected to begin negotiating benefits in 2010. But it first must go through a court-approval process, which is expected to begin early in 2008.
Although the union will become a big health care buyer, it’s already a big political donor. The UAW has given more than $2 million in every election cycle since 1990 to the Democratic Party. And Democrats appear to be listening: All three of the leading Democratic presidential candidates have proposed some form of national health care insurance.
Republican candidates have not made health care as central to their campaigns. Those who have addressed health care say they favor solutions such as health savings accounts that the UAW opposes.
But it may take more than political will to solve the problems.
The Congressional Budget Office estimates that Medicare and Medicaid could consume up to 12% of the nation’s economic output by 2050.
Meanwhile, estimates of Americans without health insurance stand at 47 million, with another 33 million who go without health insurance for at least part of the year.
Karen Davenport, director of health policy at the Center for American Progress, a Democratic think tank in Washington, cautioned that UAW officials would find it hard to change the tide.
"Even with the new roles, along with other stakeholders, they’re at the mercy of health care costs trends — and more so as a payer," she said.
