Questions from CWA Members about Health Care Reform

1. The majority of membership does not understand why it is important to have a public option. Why do we need a "public option"?

The public insurance option serves a number of purposes that may not seem important to many of our members right now, but will become very important in the years ahead. First, the public insurance plan serves as a safety net. If there are not a lot of private insurance plans offered in an area, the public plan will assure that access to good health insurance is available for individuals without coverage and for small businesses.

Also, because of the efficiencies of size and administrative streamlining, the public insurance plan is expected to be less expensive than private insurance plans. For example, the cost of running Medicare (the large public plan that covers older Americans) takes only 2 cents out of every dollar it spends, compared to between 10 cents and 20 cents for private sector plans. This is one reason why the overall cost of insuring someone under private insurance has risen 60% faster than insuring them under Medicare. And because private insurance plans will have to compete for business with the public plan option, they will have to keep their prices at a competitive level and find way to run their companies more efficiently. In many states there are one or two large insurers that dominate the marketplace. In effect there is little competition. A public health insurance plan would change that dynamic and bring costs down.

What’s important to remember is the public insurance plan option is just that – an option. It would be one of several plans that individuals and small businesses could choose from in a new Health Insurance Exchange. The public option will not be available to CWA’s medium to large employers. The vast majority of Americans would continue to get their coverage through a private insurer.

2. Why is CWA so involved in health care reform? The union should just stay out of politics and stick to bargaining our benefits.

The skyrocketing cost of health care in America is an important issue for all workers. Over the past 10 years, health care costs have been rising 3 to 4 times faster than wages and outpacing overall inflation. Health care has become the fastest growing component of labor costs. We have been struggling in every sector, in every district and with every employer just to maintain the benefits we have, and in most cases we have been losing ground on health benefits. Money that should be going towards wage increases is instead being eaten up by exploding premiums that at best only maintain our current benefit levels. America’s dysfunctional health care system is costing our members too much for us to stay on the sidelines. If we do not achieve health care reform that guarantees quality, affordable health care and that controls costs, then our battles at the bargaining table will only get worse.

3. I like my health care coverage. I don’t want the government involved in any of my daily and personal decisions – those are between me and my doctor. We should keep health care private.

The most important thing to remember about the bill is that people who already have health care coverage through their employers – like most CWA members – will keep that coverage. And we believe that because reform will help bring down and control costs, maintaining and even improving our plans in bargaining will be easier in the future.

There is nothing in the health care legislation that will insert the government in decisions between a patient and a doctor. There is no Commission that decides what treatment you get and no Commissioner that will oversee your doctor’s practice. Right now, insurance companies regularly insert themselves in the decisions made by doctors and patients. Insurance bureaucrats often deny you coverage that your doctor recommends. The goal of the legislation is to regulate insurance companies so that they cannot deny coverage to anyone on account of their age or health; to make sure that coverage is affordable; and to make sure no one goes bankrupt as a result of serious medical needs.

There is an advisory commission that will recommend from time to time what minimum level of benefits ought to be included in the standard set of guaranteed benefits. At this point in time, the House bill includes a range of benefits such as prescription drugs, mental health, maternity care, well baby care and preventive services, along with coverage for hospitalization and doctor visits. The bill is intent on preserving, but improving, the health care delivery system we now have – private doctors, private hospitals and other facilities, and private insurance companies.

4. How will health care reform affect our company-paid benefits for both active and retired employees?

There will be a number of benefits that flow to workers who get health care from their employers. First, we would expect to see health care costs and cost increases moderated. Because reform will reduce the number of Americans who do not have insurance coverage, the cost of our plans will be reduced. One study estimated that the cost of covering the uninsured added $1,000 to the cost of every family insurance plan.

Next, because all employers would be required to make a contribution to coverage for their workers (in the House and HELP Committee bills) the cost to our employers would be reduced. Currently we find that the plans we negotiate also cover working spouses and dependents of our members. When the employers of those dependents begin contributing, then the cost to our employers is reduced. One consulting firm estimated that if every employer were required to cover their own workers, then large employers like ours would see a cost decrease of about 7%. The same will hold true for our retirees. When more individuals get coverage, the cost of our plans is reduced.

In addition, in the House bill and the HELP Committee bill, there is a $10 billion trust fund set up that will help retiree health plans who offer benefits to pre-Medicare retirees. That money is set aside to stabilize retiree health plans by subsidizing employers so that they keep providing early retirees with coverage. As you know, the first group employers try to drop during bargaining is early retirees. Verizon has done some preliminary costing of that benefit and reports that the provision could save up to 24% of the total cost of this group. That should ease the pressure on bargaining for the benefits for that group.

5. There are different versions of health care reform that are being pushed. Evidently they are not all the same. Which one is CWA supporting?

CWA strongly supports the House bill -- H.R. 3200 which has passed the three Committees that have jurisdiction over health care reform. It most completely meets our principles and priorities for health care reform:

• All employers should provide coverage to their workers or pay into a trust fund to pay for their coverage. Some exceptions should be made for lower-wage small businesses.
• Pre-Medicare retirees – those between the ages of 55 and 64 – must be guaranteed coverage.
• To bring costs down there should be a public health insurance plan option similar to Medicare to compete against private insurance companies.
• There should be no taxation of workers’ health care benefits.

This bill will be voted on by the full House later this month.

The Senate HELP Committee has also passed a bill and the Senate Finance Committee is working to pass a bill. Those two bills will be merged and voted on by the full Senate. We will need to push for the best bill possible out of the Senate and then urge that the House bill prevail in conference.

6. We need better benefits for senior folks. A lot of people stretch out their medications to make it last longer. I am 51 and this is what I have to look forward to when I retire. People like my parents in their golden years should be able to live a comfortable life without worrying where they will get money to buy medications or to see a private doctor.

We think this is the most vulnerable group when it comes to health care – older Americans on Medicare and even more so, those who are pre-Medicare, between the ages of 55 and 64. The legislation does a number of things that will help both groups.

For Medicare retirees, it improves Medicare by adding preventive benefits and closing the donut hole for prescription drugs. It saves costs in the Medicare program by eliminating the huge subsidies that insurance companies get from the government for offering Medicare Advantage plans.

As mentioned in a previous question, for pre-Medicare retirees, the House and HELP Committee bills include a $10 billion trust fund that will help stabilize retiree health plans. That money is set aside to subsidize employers to be sure they keep providing early retirees with coverage. As you know, the first group employers try to drop during bargaining is early retirees. It would reimburse retiree plans when the cost of care for an individual exceeds $15,000 and up to $90,000. The government will reimburse the plan 80% of those costs. These bills require that the money from this trust fun be used to lower premiums for the plan or to reduce out of pocket costs.

In addition, the House bill and the HELP bill offer improvements for retirees, or for those older people still working, who buy their coverage from the Health Insurance Exchanges. The legislation will limit how much insurance companies can charge an individual based on age. Currently insurance companies charge from 5 times to 20 times more if an individual is over age 55. The House legislation would cap that age rating at 2 times and the Senate HELP bill would cap it at 5 times. There are other risk adjustment provisions as well that should make health care more affordable for retirees who do not get coverage from their former employers.

7. I lost my job of almost 22 years when … the job was sent overseas. I was eligible for COBRA continuation benefits. The cost for my wife and I – for less than stellar coverage – is $1900 a month. If it wasn’t for the government TAA program I wouldn’t be able to afford the coverage and likely I could not get health insurance at all because of pre-existing conditions. I will lose the TAA subsidized insurance coverage after 18 months. I hope to get a job, but it is hard to imagine finding one that will offer good health insurance or pay enough to cover my family’s medical expenses. I hope health care reform will help me out. I know others like me who need help too.

This story describes exactly why we need reform. In our current system, when someone loses their job it is impossible for them to find affordable coverage. This legislation will guarantee access to affordable coverage by regulating the worst practices of the private insurance industry and providing subsidies for individuals on a sliding scale according to their ability to pay. Also, reform will lower the cost of insurance on the individual market by harnessing the same efficiencies of scale large employers use when they provide insurance. Under a reformed system, individuals and small businesses will be pooled together into large groups that buy insurance from insurance plans in an Exchange. This will make the coverage a lot more affordable. And we believe that if there is a public health insurance plan competing against private insurers costs will be driven down even further – benefiting consumers and businesses.

8. CWA and other Unions and members of the AFL-CIO worked very hard over the last 3 years to get the number of Democrats in office to at least 60. Now that they are in office, we are learning that we may not get what each one promised when they ran and asked for our support. Can President Larry Cohen, or will he, let all these Dems. know that we may not support them the next time around? I know without at least some kind of Dem. in office it would even be worse--BUT-- if we do not get these TWO important bills (health care and Employee Free Choice Act), does it make sense to keep them in office?

We will be looking at each candidate with an eye to how they performed on our two key issues and other issues as well. On a case by case basis we will decide what our options are for 2010 in each congressional district and decide on a plan that best advances the causes important to our members.

But until then, it’s very important for members of Congress who CWA and the larger labor movement helped to get elected to hear from our members now. Politicians need to know that we are holding their feet to the fire to get the job done on the Employee Free Choice Act and Health Care Reform. If they don’t hear from you – the people who live in their communities and who they answer to at the ballot box – they won’t know how important it is to you and to their job security.

9. I believe the only way the government can afford this new $1 trillion health care program is to tax regular people like us. And I object to that. What’s CWA’s position?

CWA has been leading the fight in Washington against the taxation of benefits. So far we have won that fight thanks to our members lobbying their elected officials to oppose this tax on working families. President Obama strongly opposes such a measure. He defeated John McCain, in part, because of McCain’s strong support for the taxation of benefits. We can count the president on our side on this one. President Obama proposed that a large chunk of the money come from taxing the wealthiest Americans – that’s a position CWA supports.

The House bill proposes a small surtax on the top 1% of families, those making more than $350,000 per year for joint filers and $280,000 per year for single filers. This would raise half the money needed for health care reform. The other half comes from reducing subsidies to insurance companies, drug companies and by reducing excessive payments to providers.

A small group of senators is still proposing that our health care plans be taxed. They are in the minority. But they need to be stopped. We can only do that if CWA members become a lot more active and write and call your senators over the next week or two.