[ Issues ]

HealthCare

National Health Care Reform

As more and more Americans have lost their jobs during the current economic crisis, individuals and their families have also lost their health care benefits. We can expect the number of Americans without health care coverage – already at record levels because of the erosion of employer-provided benefits – to climb still higher. Meanwhile, the cost of health care has continued to rise at a rate significantly higher than inflation, increasing pressures on working families, businesses and the government. Workers are paying significantly larger shares of their premiums and steeper deductibles, co-payments and co-insurance while getting less coverage. Older manufacturing companies continue to suffer from the burden of legacy health care costs that all too often have contributed to bankruptcies, plant closings and job loss, as well as the loss of health insurance coverage for many retirees. At the same time, the quality of care provided by our health care system is too often inadequate.

The UAW continues to believe that the best answer to the many problems facing our health care system in the United States would be the enactment of a comprehensive, national health care reform plan. This reform plan should guarantee universal coverage for all Americans, without regard to age, income, health status or employment. All Americans should receive comprehensive health care benefits as a basic right. A national health care plan should get rid of the massive waste and inefficiency that now characterizes our health care system, while ensuring quality care for everyone. At the same time, it should contain an equitable financing mechanism that protects working families and the poor, and establishes a level playing field among all businesses.

President Obama has made it clear that enactment of national health care reform is one of the top priorities of his administration. During the presidential campaign, he set forth a health care reform plan that would strengthen employer-based coverage, make insurance companies accountable and ensure patient choice of doctor and care. Under the Obama plan, individuals will be able to keep the health insurance coverage they currently have. But individuals who currently have coverage and the uninsured will also be provided with new, affordable health insurance options. This will be accomplished by:

• guaranteeing eligibility for all health insurance plans;

• creating a National Health Insurance Exchange to help Americans and businesses purchase private health insurance;

• establishing a new public plan option;

• providing tax credits to help families and small businesses afford health insurance;

• implementing programs to reduce health care costs;

• requiring all large employers to contribute toward health coverage for their employees or toward the cost of the public plan;

• requiring all children to have health care coverage;

• expanding eligibility for the Medicaid and SCHIP programs; and

• allowing flexibility for state health reform plans.

President Obama's health care plan will require insurance companies to cover pre-existing conditions so all Americans, regardless of their health status or history, can get comprehensive benefits at fair premiums. The National Health Insurance Exchange will enable any American to enroll in the new public plan or an approved private plan. Income-based sliding scale tax credits will be provided for families and businesses that need assistance. The Exchange will require all health insurance plans to provide comprehensive benefits at least as generous as the new public plan, which will be similar to the existing Federal Employees Health Benefits Program. The Exchange will require all plans to meet the same standards for quality and efficiency, including affordable premiums, co-pays and deductibles, simplified paperwork, and easy enrollment. The Exchange will provide portability so that individuals will be able to change jobs without changing coverage.

Under the Obama health care plan, large employers will be required to provide meaningful health care coverage to their employees, or to contribute to the public plan. This will help to establish a more level playing field among employers.

The Obama health care plan is committed to reducing health care costs by $2,500 for working families. This will be accomplished through a number of initiatives, including the establishment of a catastrophic reinsurance program, introducing modern information technology into the health care system, support for disease management and health promotion programs, and the dissemination of better information on the effectiveness of drugs and medical procedures. Prevention and public health will be strengthened.

President Obama has vowed to move forward quickly with his national health care reform proposal. Already, key House and Senate committees are making preparations to act on this priority issue. A number of different bills may be considered by Congress. But Democratic congressional leaders have pledged to work closely with the Obama administration to achieve a consensus that can lay the groundwork for enactment of national health care reform legislation.

During the coming year, the UAW and a broad coalition of progressive allies will be mounting a major campaign to educate members of Congress about the need for comprehensive national health care reform and the positive approaches contained in the Obama plan. We will be emphasizing that now is the time for Congress to act on this issue.

At the same time, the UAW and the rest of the labor movement will strongly oppose any proposals that would tax health care benefits for workers and retirees. This would represent a major tax increase for workers and retirees. It would also undermine comprehensive negotiated group health care benefits.

We will also oppose expansions of individual health savings accounts (HSAs). The tax benefits associated with HSAs flow mostly to upper-income individuals. And these accounts also would undermine comprehensive group health care coverage, leaving workers and retirees with high-deductible catastrophic health care coverage that shifts the burden of health care costs onto those with the greatest medical needs. This would penalize older workers, individuals with serious medical conditions, and the disabled.

Action

Medicare

When the Bush administration and the GOP-controlled Congress enacted the Medicare prescription drug (Rx) program in 2003, they included a provision that prohibits Medicare from negotiating drug price discounts from the pharmaceutical companies. This represented a direct payoff to the major drug companies, who had been strong supporters of President Bush and congressional Republicans.

The UAW and a broad coalition of labor, senior citizen and other groups denounced this provision. The Veterans Administration already uses its bargaining power to negotiate drug price discounts under the VA health care program. In our judgment, there is no reason Medicare should not be allowed to do the same for our nation's seniors. This would help to reduce costs, both for the Medicare program and its beneficiaries.

When the Democrats regained control of the House and Senate after the 2006 elections, one of their first priorities was to move legislation to eliminate the prohibition on Medicare negotiating drug price discounts. In the first 100 hours, the House passed UAW-backed legislation that would require Medicare to negotiate drug price discounts. Subsequently, the Senate took up somewhat milder legislation that would have allowed Medicare to negotiate such discounts. Unfortunately, even this softer provision was too much for Senate Republicans, who used a filibuster to block it.

Thanks to the election of President Obama and expanded Democratic majorities in the House and Senate in the 2008 elections, we are now in a position to move forward quickly to enact the Medicare drug price negotiation legislation in the 111th Congress. The UAW and our allies will be urging Democratic congressional leaders to make this one of the first actions by the new Congress in 2009.

The UAW also has major concerns over the huge subsidies for private insurance carriers under the Medicare Advantage plans. The reimbursement rates for these plans are 12 to 19 percent higher than beneficiary costs under traditional Medicare. These subsidies are designed to advance the right-wing agenda to privatize Medicare. To prevent this, and to provide savings that can be used to improve the traditional Medicare program, the UAW will be urging the Obama administration and Congress to eliminate the huge subsidies for Medicare Advantage plans.

In addition, the UAW will continue to work with other labor and senior citizen groups to urge Congress to approve other reforms to the Medicare Rx program, including measures to improve the benefit (e.g., eliminate the "donut hole"), guarantee access to a federal Medicare-sponsored option, provide the same level of assistance to retirees who have drug coverage from their former employer, and allow the importation of safe, lower cost drugs from other countries.

Action

Medicaid and the State Children’s Health Insurance Program (SCHIP)

The Medicaid program provides health care to 56 million Americans. This includes low-income children, pregnant women, people with disabilities and senior citizens. In addition, under the State Children’s Health Insurance Program (SCHIP) the federal government provides funding to the states to help support programs to provide health insurance coverage to children in low-income families.

In the last Congress, the House and Senate passed legislation that would have provided the SCHIP program with an additional $35 billion in funding to cover 4 million more uninsured children in low income families. Unfortunately, President Bush vetoed this legislation, and the House was not able to override his veto. President Obama has pledged to sign this SCHIP expansion legislation as soon as it reaches his desk. Thus, the UAW and our progressive allies will be urging Democratic Congressional leaders to make passage of this vital legislation one of the first actions by the 111th Congress.

The Bush administration issued an SCHIP directive that limited state efforts to expand coverage for children in moderate income families. It also issued seven Medicaid regulations that prompted cutbacks in coverage for children in low income families, and shifted massive costs onto states for necessary Medicaid-funded services. However, the Democratic-controlled Congress succeeded in enacting legislation that deferred implementation of six of these regulations until April 1, 2009. The UAW and our progressive allies will urging the Obama administration to act immediately to rescind the SCHIP directive and harmful Medicaid regulations. We will also be urging the Obama administration and Congress to make sure that the SCHIP and Medicaid programs are adequately funded.

Action

Retiree Health Care Legacy Costs

Major auto, steel and other older manufacturing companies have much higher health care costs because they have many retirees and the age of their active workers tends to be older. In contrast, newer manufacturing companies have much lower health care costs because they have few retirees and a younger active workforce. Foreign competitors also have much lower health care costs in their home countries because these costs are spread across their entire societies through national health care programs. The net result is that older manufacturing companies in the United States have been placed at a tremendous competitive disadvantage due to their legacy health care costs. This has led to cutbacks in health care coverage for workers and retirees. In some cases, it has also contributed to layoffs, plant closings and even bankruptcies for certain firms.

Unfortunately, the Bush administration failed to step forward with any meaningful proposals to address this problem. Now that the Democrats have control of the White House and Congress, we have an opportunity to address this difficult issue. During the 111th Congress, the UAW will continue to work with other unions and older manufacturing companies in support of various proposals that would provide some relief for retire health care legacy costs. This includes proposals to establish a catastrophic reinsurance program, to allow early retirees to buy in to Medicare, and to expand eligibility for the existing health coverage tax credit (HCTC) that is now available only to early retirees whose companies have gone bankrupt and dumped their pension plans on the Pension Benefit Guaranty Corporation. Whatever the mechanism, we need the federal government to step forward to ensure that retirees maintain their health insurance coverage, regardless of whether it is provided by their former employer or through a VEBA. We also need measures to help level the playing field so that older manufacturing companies are not placed at a competitive disadvantage because of their retiree health care legacy costs.

Action

Generic Biologics

Spending for biologic medications (drugs made from a living organism or its products and used in the prevention, diagnosis and treatment of cancer and other diseases) is one of the fastest growing expenses in health care. By some estimates, Medicare could save $14 billion over the next 10 years if a pathway existed at the Food and Drug Administration (FDA) to create generic versions of these biologic drugs. Overall savings for government and private sector health care plans are estimated to be $71 billion over this period. While the process to create generic or “follow on” versions of these biologics is complex, it is not beyond the capacity of any well-trained biochemistry team working in labs equipped with the latest technology available on the commercial market. Last year our Democratic allies in Congress introduced legislation to establish a pathway for the FDA to approve generic versions of biologics. During 2009 the UAW will continue to fight to pass this important legislation.

Action

Drug Safety

The Food and Drug Administration is the federal agency charged with new drug approval and ongoing surveillance for serious side effects after a drug has been put on the market. In recent years concerns have been raised about underfunding and undestaffing of the FDA's safety department. There have been increasing problems associated with adverse side effects from a number of drugs, and the U.S. has also had to deal with tainted drugs from China. Drug manufacturers have continued to exert undue influence over FDA actions. And advisory committee members often have not been required to sign a conflict-of-interest waiver, despite having earned speaking fees from drug manufacturers.

In 2007 Congress approved FDA legislation that included some drug safety reforms. However, additional reforms are still needed. During the coming year, the UAW and our coalition partners will continue to push the Obama administration and Congress to make improvements in our drug safety programs, including:

• providing adequate funding and staffing for the FDA;

• ensuring that NO scientists with industry ties are allowed to serve on FDA advisory committees;

• in addition to beefing up FDA surveillance efforts, requiring drug manufacturers to have a risk evaluation and mitigation strategy for monitoring every new drug approved by the FDA during its first few years on the market;

• requiring mandatory registration of all clinical trials, so patients, doctors and researchers can have access to and analyze all of the data companies have about their drugs; and

• requiring better warning labels on new drugs, and a waiting period before direct-to-consumer advertising can begin.

Action