UAW backs Health Care Reform

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UAW backs reform, cites $10B to defray costs for retirees

Posted Monday, Aug 24, 2009, 11:46 am in Employee News

The United Auto Workers is urging its members to back efforts in Congress to reform health care coverage, citing a provision that includes $10 billion to defray the medical costs of union members and others in retiree group health care associations, The Detroit News said.

The bill, approved by a House committee late last month, includes Section 164, a reinsurance program for retirees, according to a summary of the bill from House Speaker Nancy Pelosi’s office, the paper said. It sets aside $10 billion to establish a temporary reinsurance program to provide reimbursement to participating employment-based plans for part of the cost of providing health benefits to retirees age 55-64 and their families, the News said. A Senate version has nearly identical language.

Employment-based plans must apply to participate and be approved, and the health care plan would reimburse participating employment-based plans for 80 percent of the cost of benefits in excess of $15,000 and under $90,000, the paper said. The plans are required to use the funds to lower costs borne directly by participants and beneficiaries, the story said.

“We need meaningful health care reform if we are going to get our economy going again,” UAW President Ron Gettelfinger said in a statement posted on the union’s Web site Thursday. “Decent, affordable health care should be a right of every American, not a privilege.”

The provision could provide badly needed financial support to hourly retirees, who have agreed to accept stock in exchange for billions owed in retiree health care at General Motors Co. and Chrysler Group LLC, the News said. As part of the deal at Chrysler and GM, it eliminated hourly retiree dental and vision coverage and some prescription drugs for hourly retirees, the paper said. Low-income retirees who previously had no co-pay must now make an $11 monthly co-payment, the News said.

But the congressional provision also could boost other groups, including steelworkers, municipal workers and others with similar health care associations, the story said. The UAW letter noted the health care bills “provide assistance to employers and Voluntary Employee Beneficiary Associations (VEBAs) to help them continue coverage for early retirees.” (The Detroit News)