Health Care Reform: What's in it for Union Members and Families?

By 2019, at least 57 million Americans are expected to be uninsured, and overall spending by employers on worker premiums is projected to rise dramatically by at least 72 percent.

By 2019, at least 57 million Americans are expected to be uninsured, and overall spending by employers on worker premiums is projected to rise dramatically by at least 72 percent. This crisis is something union negotiations can’t fix. That’s why AFSCME is waging a national campaign to protect and improve our health care and guarantee quality, affordable coverage for all. We know that in order to rein in costs and truly fix the nation’s ailing economy, we’ve got to fix the entire health care system. 

At press time, the U.S. House and Senate were considering different health care reform bills. They will be merged into one final proposal that will be sent to Pres. Barack Obama for his signature. Currently, the House bill (H.R. 3962) meets the needs of working families best. It addresses the following critical issues, which we are fighting to keep in the final legislation that is sent to President Obama’s desk.

Most Americans will keep their current plan, or have new choices.

• Workers and their dependents will keep their employer-provided health plan and doctors, or continue to use Medicare, Medicaid, and veterans’ care. Unions will continue to negotiate benefits.
• Small businesses and individuals who buy coverage on their own—or do not have access to affordable coverage at work—will be able to buy from a variety of quality plans through a new health insurance buying pool known as an exchange.
• The pool will have group rates and sliding scale coverage and will be offered in every state. Larger employers will be added over time.
• Medicaid, at a minimum, will be expanded to all adults earning up to $16,245 per year.

Reform includes the choice of a new public insurance option.

• Participants who enroll in the new exchange pool can choose between private health plans or a quality, nonprofit public insurance plan option. Participation is voluntary. This public option will be similar to Medicare, but it will be available for people under 65 and not involve an insurance “middle person.”
• The public option will help lower costs in all health plans by setting quality standards and offering good value, competitive prices and benefits to keep HMOs and other insurers from overcharging.

Reform reduces health care costs and provides more money for wages.

• The cost of care for the uninsured raises premiums for insured persons an average $1,100 per year. Governments also pay for this “uncompensated care” provided by hospitals and doctors. This cost shift, and the stress on public budgets and public workers, will diminish as everyone is covered.
• Improvements in quality and other system changes will keep premiums down and reduce a variety of health care costs. Hospital readmissions will be reduced. Care coordination and training for new health care providers will increase. New Medicaid and Medicare payment policies will lower drug prices, and insurance regulations will be strengthened. The public option will end the monopoly currently enjoyed by private insurers. Limits will be set on the percentage of premiums that insurers can use for profits, versus actual patient care.

Employers must provide health care or contribute to coverage.

• Employers must pay at least 72.5 percent of their workers’ premiums (65 percent for family coverage) or up to 8 percent of their payroll into a fund for workers’ coverage. Very small employers will be exempt. Employers will also be required to contribute for part-timers on a sliding scale. This promotes fair competition and prevents employers from dumping the costs of their uninsured onto everyone else.

Reform will fight privatization by requiring employers to pay for coverage.

• Right now, employers aren’t required to pay for health care, which allows private contractors to provide cheap bids to do the work that takes away our jobs. Reform will require these contractors to pay for coverage. Reform will also provide savings to states and loosen tight public budgets. This and the employer mandate will reduce pressure on employers and lawmakers to cut our jobs.

Retiree benefits will improve.

• Medicare will be preserved and will offer much-needed new benefits, like free preventive care.
• Many employers will receive a subsidy to maintain their health benefits for pre-Medicare retirees.
• The prices paid by retirees for many prescriptions in the Medicare drug benefit “donut hole” will be cut in half. Over time, this gap in coverage will be fully eliminated, saving many retirees thousands per year.
• Overpayments to private HMOs and insurance plans that replace traditional Medicare will be cut, freeing up dollars to protect Medicare, reduce retiree premiums and increase benefits.

States will contribute to reform and save money.

• In their capacity as employers, providers and payers of health care, states will be able to save billions of dollars under reform. However, they will be required to cover up to 10 percent of the cost from newly-eligible Medicaid enrollees. States will also be required to cover any new increase in enrollees who meet current eligibility guidelines. We are working to ease the burden on states.

Strong new rules on insurers will protect patients and fight insurance company abuses.

• Insurance companies will be prohibited from imposing annual or lifetime coverage limits, refusing to cover “pre-existing conditions,” denying coverage or increasing premiums based on occupation, health condition or gender. Age-based rate increases will be reduced.
• Individuals and small employers will have more buying clout in the new exchange. This clout and the public option will keep insurers accountable and improve quality and cost for everyone.

Reform will decrease the deficit and help families buy coverage.

• President Obama pledges that reform will “not add a dime to the deficit.” The nonpartisan Congressional Budget Office projects that the House and Senate proposals will decrease the deficit.
• Via the new exchange, new tax credits will make affordable insurance available for people who earn up to $43,320 or $88,200 for a family of four. Many small businesses will also receive subsidies to buy insurance for their workers.
  Progressive ways to pay for reform include: enact a public option; increase employer responsibility; raise income taxes on the top 1 percent of earners; cut overpayments to private Medicare plans; curtail drug prices; improve health care delivery and more.
• Some senators have proposed a 40 percent “excise tax” on higher-cost health plans which AFSCME strongly opposes. This would be passed on to workers and cause benefit cuts.

Want to learn more about what health care reform means for you and your family? Join one of several conference calls and AFSCME’s health care experts will answer your questions. To participate, sign up at afscme.org/healthcare.