Health Care: It's Now or Never!

This is it - It’s Now or Never!

Congress is shaping health care reform legislation right now. No other group is able to mobilize like we can. What labor does over the next few weeks will determine whether we win health care reform that:

Controls costs
Provides guaranteed coverage for all Americans
Holds insurance companies accountable
Includes a public health insurance plan option
Requires all employers to pay their fair share
Rejects new taxes that would hurt working families - costs are crushing us already.

Sample Letter for Campaign

Subject: Health Care: It's Now or Never!

Dear [ Decision Maker ] ,

I've been closely following the debate on health care because my family and so many others need reform. What I don't understand is why there is even a debate at all. Members of Congress shouldn't be confused about which way they're going to vote on this issue. To me and other constituents, it's clear cut: Will you stand with big insurance companies or will you stand with us?

Working families need health care reform that will control costs, guarantee coverage and finally hold insurance companies accountable. The public insurance plan option is the best way to do that.

After years of raising premiums, denying claims and rejecting people who need care due to pre-existing conditions, insurance companies now are playing the victim. Their thirst for profits at any expense is busting the budgets of our families, businesses and state and local governments. No one begrudges insurance companies or any other business for making a profit, but they shouldn't be allowed to do so at the expense of families and the good of our country.

Please vote to support real health care reform.

Sincerely,

Campaign Launched:
October 01, 2009

Background Information

A Public Health Insurance Plan Makes Reform Work

What we are asking for: A public health insurance plan should be an option for everyone, alongside private health insurance plans. The public health insurance plan would compete on a level playing field with private plans and would be administered by government but funded through premiums.

A public health insurance plan makes coverage more affordable.

Escalating health care costs are a growing burden for working families, employers and the government. A public health insurance plan will have lower administrative costs than private health insurance plans and it will not have to earn a profit. These features, combined with its ability to establish payment rates, will result in lower premiums for coverage through a public health insurance plan.
Through competition, even those purchasing coverage through a private health insurance plan will benefit from lower costs. When premiums are lower, that means less spending on federal subsidies for those who qualify for financial help.

A public health insurance plan drives quality improvements and more rational provider payments.

A public health insurance plan can introduce quality advancements and innovation that private insurance companies have little incentive to implement.
Just as Medicare has led the way with payment reforms that are driving quality improvements now being adopted by private plans, a public health insurance plan can develop innovative payment mechanisms, expand quality incentives and adopt evidence-based protocols.

A public health insurance plan promotes competition and keeps private plans honest.

Consolidation in the private insurance industry has narrowed price and quality competition. In fact, in 2005, private insurance markets in 96 percent of metropolitan areas were considered highly concentrated and anti-competitive, which left consumers with little choice.

Taxing Health Care Benefits: The Wrong Prescription

The draft Senate Finance Committee health care reform bill would slap a 40 percent excise tax in 2013 on health care plans valued at more than $8,000 for individual coverage or $20,000 for family coverage. In today’s dollars, that works out to about $6,500 for individual plans and $17,000 for family plans. This would amount to an enormous tax on workers’ health care benefits that would grow very quickly, as insurers increased premiums by an equivalent amount. It would shift health care costs onto the backs of workers, fail to bring down the growth of health care costs and be politically disastrous.

The excise tax would hit union and nonunion plans alike.
Unions are estimating that members would be slammed with disastrous new costs, with assessments over the next 10 years projected at:

$8,467 for individual coverage and $21,434 for family coverage per active Communications Workers of America member for the most popular health care plan offered to its members in 26 states.
$24,385 for individual coverage and $50,748 for family coverage for every CWA pre- Medicare retiree.
$65,380 for family coverage per active AFSCME member in Nebraska.
$12,000 for individual coverage for each of 500 United Steelworkers members working in a large paper facility in Maine and $16,500 per USW retiree, with family coverage at $23,000 for workers and $37,000 for retirees.
$16,400 for individual coverage and $50,000 for family coverage for each of the 600 USW active members working in one production facility in West Virginia.
$35,300 for family coverage for 16,000 Air Line Pilots Association members with unionnegotiated plans.
$22,021 to $24,179 for family coverage, depending on the state, per active UAW member employed by one of UAW’s largest employers.
$18,292 for individual coverage and $21,712 for family coverage for each active Mine Workers member employed by one large employer in West Virginia.

Over time, the tax would hit lower-cost plans. After 2013, the threshold amount at which the tax applies would rise at a much slower rate than plan costs are expected to rise, exposing more and more lower-cost plans to the tax.

The excise tax would be a direct tax on many workers and retirees covered by Taft-Hartley multiemployer plans, self-funded plans and the retiree plans recently established in the auto industry and as part of bankruptcy reorganizations. AFL-CIO Toolkit for September–October 2009 Health Care Actions 17 The excise tax would be an indirect tax on other workers and retirees covered by unionnegotiated plans, because insurance companies likely would pass costs on to workers. The excise tax would cause some employers to reduce benefits to avoid the tax altogether, shifting the burden of paying for health care costs onto the backs of workers.The excise tax would not bring down health care costs. There is no evidence that taxing health benefits—by taxing insurers and employers that provide higher-cost plans or by capping the tax exclusion for individuals—would rein in private-sector spending on health care. The enormous waste in our health care system is not driven by consumers. The vast majority of health care spending is for people who genuinely need care, not people who demand care because their insurance covers it. Most treatments occur because doctors recommend them, regardless of coverage. The key to reining in health care spending is to get providers to deliver care in more cost-effective ways. Increasing out-of-pocket costs may actually lead consumers to forgo necessary care and make counterproductive health care decisions.

Many health care plans have higher costs for reasons that have nothing to do with wasteful or unnecessary care. The cost of health insurance varies widely depending on factors that have nothing to do with any supposed indifference of consumers to the cost of care—factors such as geography, size of the employer and percentage of the company’s workforce that is older or sick. For example, the steelworkers represent workers at a small manufacturer of name-brand sporting goods, where layoffs due to international competition have left a highly skilled workforce whose average age is older than 60 and whose average amount of experience is 40 years. Family coverage costs almost $21,000. This is 40 percent more than the average for a similar USW group with the same plan, simply because of the age and health conditions of the group.

Union-negotiated plans are not “Cadillac” plans offering excessive benefits. The benefits provided under union-negotiated plans are roughly comparable to those of other plans, but over the years union members have consistently chosen to give up higher wage increases in exchange for limits on out-of-pocket health care costs.

The excise tax is the opposite of reform. One of the principal goals of health care reform is to guarantee quality, affordable health care for working families as health care costs spiral out of control. The excise tax would raise health care costs for workers, including some of the most vulnerable workers-workers in small firms, workers in firms with sicker employees and workers in firms with older employees.

The excise tax would be political disaster. In a recent national poll, 54 percent of respondents opposed “placing a tax on the highest-cost private insurance policies in order to pay for health care reform,” and 34 percent were strongly opposed, while 41 percent were in favor.

There are better ways to pay for health care reform. President Obama proposes capping itemized deductions at 28 percent, which would raise $350 billion over 10 years. Applying the Medicare tax to non-wage income would raise $160.3 billion from 2012 to 2019. The House health care reform bill would impose a graduated surtax on adjusted gross income of more than $350,000, raising $458.4 billion from 2012 to 2019.

Pay or Play: Holding Costs Down, Leveling the Playing Field

What we are asking for: As a part of getting to universal health coverage, employers must be required either to offer coverage to their workers or pay into a fund to finance coverage for uninsured workers. And employers that contribute to pre-Medicare retiree benefits should get relief.

Health reform must build on what works, which for 160 million Americans is the employer-based system.

A pay or play requirement will build on the current employer-based system by encouraging more employers to offer coverage and penalizing those that do not.
The vast majority of the uninsured are in families with at least one full-time worker. Making employer-based coverage stronger will help cover more uninsured workers.
Pay or play will shore up employer-based coverage and minimize disruption for those who now have coverage and want to keep it.

An employer requirement will hold down costs and bring in needed revenue.

Pay or play holds down federal costs by keeping employers from dumping low-wage workers into new subsidized plans.
Pay or play generates revenue to help fund subsidies for low-income individuals and the uninsured.

An employer requirement will level the playing field.

Pay or play at fair and reasonable levels will level the playing field so free-rider firms can’t shift costs to employers that offer good benefits.
A recent study found more than $1,000 of every family plan premium goes to cover the cost of care for the uninsured, most of whom are workers.

Businesses and their allies will argue they can’t afford to meet this requirement in such a bad economy.

The vast majority of firms that currently offer health coverage will not see any new costs. They will see their costs go down when we eliminate cost shifting and make reform more sustainable.
The only firms that may see their costs increase are those that don’t offer benefits or offer benefits that are too inadequate to meet a reasonable test.
The vast majority of firms that don’t offer health coverage are small and mostly lowwage. Health care reform will give small firms more affordable options for providing their workers with health benefits, probably in combination with additional subsidies for those with low-wage workers.
Any new costs can be offset by gains in higher productivity and a healthier workforce. Comparable increases in the minimum wage have not led to the economic dangers predicted.

Relief for employers that provide benefits for pre-Medicare retirees.

Employers that contribute to retiree health benefits for workers ages 55 to 64 deserve relief. This population generally has higher health care costs, and people in this age bracket who don’t have employer coverage cannot find affordable coverage on their own. Policy options include allowing this group to buy into Medicare, using reinsurance aimed at higher-than-average costs to spread those costs more broadly, and expanding Medicare eligibility to begin at age 55.