Long Island Forum: Access to Health Care Impact on Business and Labor

1. Long Island Forum: Access to Health Care Impact on Business and Labor November 8, 2007 Ruth Antoniades Labor Health Alliance

2. Background: Labor Health Alliance • The Labor Health Alliance (LHA) is a non-profit health care purchasing cooperative formed in 1996 by NY area Fund Administrators. • The LHA mission is to provide an opportunity for collectively bargained Funds, with their participating members, unions and employers, to purchase quality, cost effective health care services. • Funds share information, have access to negotiated services and benefits, Pharmacy, PPOs, Credit Balance Recovery and others. • Work with Teamster Center Services and the Entertainment Industry Coalition Funds • Participate with 17 other regional Labor-Management coalitions in the National Labor Alliance of Health Care Coalitions • Work with business coalitions on community based quality initiatives • Retired Members’ Health Program—protecting our benefits serving as an advocate with Medicare changes.

3. Access to Health Care • What is access to health care? • Affordability and availability of care • The number of people without health insurance has increased steadily, now totaling about 47 million Americans.   • Between 2004 and 2005, at least 1.3 million more people under the age of 65 were added to the ranks of the uninsured.  • Two-thirds of the uninsured are poor (making less than $19,971 for a family of four in 2005) or near-poor and 80 percent are from working families.  • Most Americans obtain health insurance coverage through their employers.  • Family premiums are up by 87 percent over the last five years, growing five times faster than worker’s wages.

4. Access to Care • With the cost of health insurance outpacing inflation and wage increases, more employers are opting out of the market.  • Jobs that are available are less likely to offer health benefits. • Family incomes have not kept pace with health care inflation making non-group coverage unaffordable for most families.  • Medicaid and the State Children's Health Insurance Program have filled the coverage gap, especially for children. • Medicaid and uncompensated care costs are straining budgets.  • Where does the burden of coverage lie?  • Is health insurance a personal responsibility?  • Should employers be the main source of America's coverage?  • Or is access to health care a right of citizenship and the government's responsibility? 

5. Unions role in purchasing health care • Through collective bargaining, unions have played a role in relation to access to health care • Contract negotiations have defined employer contributions and any cost sharing with employees. • Employer contribution levels set budgeting for health benefits. • Labor and management involvement has been expanded to collaboration between collective bargaining agreements. • Provide an opportunity for plan design to meet health care needs of specific group. • Provides involvement for participants.

6. Chart 6 shows that 92 percent of union workers have access to medical care plans, compared with 68 percent of nonunion workers; 83 percent participate in employers’ medical plans, compared with 49 percent of non union workers.Source: 2005 National Compensation Survey benefits data on access and participation.www. Bls.gov/opub/cwc/cm200060120ch01.htm

7. Union membership in New York • 2.2 million of New York’s 8 million wage and salary workers are represented by unions—27%; • Union employers accounted for 38% of all money spent on health care in New York State • Total union employer spending was approximately $8 billion dollars or $4,667 per worker

8. Advantages to unions and employers • Portability within industries • Employers can participate with competitors • Collective bargaining determines priorities of all stakeholders • Able to include various sizes of employers • Creates group purchasing opportunity • Pooled funding enhances benefits available • Able to provide affordable, quality health plans

9. Taft Hartley Funds • Taft Hartley law enacted in 1947. • Taft Hartley Funds cover 26 million workers, family members and retirees • Employers contributions to funds are collectively bargained • Employer contributions and investment income are only two sources of funding • Managed by joint labor management board of trustees • Funds are legally distinct from the union and employers • Exist exclusively for benefit of participants, union members • Accountability through public filings with Department of Labor and IRS, ERISA.

10. Challenges to Taft Hartley Funds in today’s market • Continuing double digit cost increases • Fund reserves are being depleted • Primary focus of collective bargaining becomes health care • Slower wage growth and reduced contributions • Consolidation of the health care delivery system • Increase in the for profit market and profit • Reduction in local and regional carriers • Changing vendor relationships and contracting • Reduction in retiree health care coverage • Increase in retiree costs and liabilities • Role of international unions/mergers

11. Opportunities in Taft Hartley Funds • Develop new paradigms of health care purchasing to manage care not just price-- Change focus to improve care coordination and chronic care Empower members and physicians through access to information technology Ensure care is based on evidence based guidelines Assist participants to use high quality providers of care Provide opportunities for member involvement in health choices • Assist members in navigating the health care system with appropriate levels of care • Fully insured or self funding opportunities • Direct contract with providers of care and partner with vendors • Develop benefits that reflect changes in participants and community • Control data analysis and information on benefits

12. Public-private Funding Initiatives • Combine private funding from employers with public dollars • co-pays covered by public sector • Children and dependents covered by public programs • Participation in public subsidies • UNITE HERE Keeping Coverage, Health New York • COBRA subsidy, Entertainment Industry Coalition • Demonstration project for low income workers • 1199SEIU Homecare workers project • Reinsurance and stop loss coverage • HCRA surcharges • Joint purchasing pools for bulk purchasing of drugs

13. Case Study: KEEPING COVERAGE • Launched in February 2005, the UNITE HERE-Healthy New York program is the first experiment that links private and public funding to help maintain the employer-paid health insurance of unionized workers. • UNITE HERE-Healthy New York expands on a state program — Healthy New York—that lowers small employers’ premiums by covering the cost of expensive health care claims. • Designed to help small employers one at a time, UNITE HERE spent four years working with a variety of institutions — among them the New York State Department of Insurance and the UNITE HERE National Health Fund — to develop a model that expands Healthy New York to employers who are under contractual obligation to provide their employees with health benefits through contributions that they make to multi-employer benefit funds.

14. Policy recommendations • Expand the definition of small employer beyond the current limit of 50 full-time equivalent workers. • Permit ERISA funds to participate directly in Healthy New York. • Benefit funds have the administrative capacity to enroll workers, confirm their eligibility and collect financial contributions from employers. • Funds have access to thousands of workers without incurring any marketing costs. • Direct participation in Healthy New York would simplify current administrative complexities for all involved-employers, workers, unions and benefit funds alike. • Waive the “look back” provision for employers who are required to provide health insurance under a collective bargaining agreement. • Allow flexibility in designing benefits-on condition that the benefits do not affect the cost of the state's reinsurance pool-so that unions and benefit funds can create benefit plans that best reflect their members' needs and experience. From: KEEPING COVERAGE: UNITE HERE-Healthy New York Program A public-private partnership model to maintain health insurance for low-wage, unionized workers, Richard Winsten, Meyer, Suozzi, English and Klein and Michael Hirsch, Amalgamated Life Insurance Company, JANUARY 2006

15. Resources • “A Timeline of Employer Participation in the American Benefits System” ERISA Industry Committee, 6/13/07. www.erisaindustrycommitee • EPI Briefing Paper. The Erosion of Employment-Based Insurance. More working families left uninsured. Elise Gould. November 1, 2007. www.epi.org. • Issue Brief. Whither Employer-Based Health Insurance? The Current and Future Role of U. S. Companies in the Provision and Financing of Health Insurance. Sara R. Collins, Chapin White and Jennifer L. Kriss, The Commonwealth Fund, September 2007. www.commonwealthfund.org • “Keeping Coverage: A Public-Private Health Insurance Model for Low-Wage Workers.” Richard Winsten and Michael Hirsch. Hofstra Regional Labor Review, Fall 2006. www.rwinsten@msek.com • Opinion: Proposals for Health Policy. “A Shared Responsibility: U. S. Employers and the Provision of Health Insurance to Employees.” Sara R. Collins, Karen Davis, Alice Ho. Inquiry, Spring 2005. • Reinsurance: How States Can Make Health Coverage More Affordable for Employers and Workers. Katherine Swartz. The Commonwealth Fund, July 2005. • “Transforming the Health Insurance Delivery Business Model-A Labor-Management Initiative to Manage Care and Targeting Quality.” David S. Blitzstein, UFCW. Presentation to the Citizens Health Care Working Group. Salt Lake City, Utah, July 2005.

16. Conclusion • In the face of steadily rising costs, the challenges of maintaining affordable, quality health care coverage for workers is significant. • The cost of health insurance is rapidly outpacing employers’ ability to pay and workers cannot afford to take up the cost. • Public policy should work with responsible employers to meet their contractual health care obligations not subsidize those who don’t provide benefits. • Continuing to expect employers to pay the full cost of insurance simply pushes them to abandon providing health care altogether. • Without employer-provided coverage, where the employers pay for all or most of the premium, countless workers will end up either on the fully publicly funded health care rolls or with no health care at all. • The cost of not maintaining affordable, quality health benefits is costly to everyone. • Addressing access to health care is a moral, economic and social justice issue. • There is work to be done.

17. Ruth AntoniadesLabor Health Alliancev: (212) 931 5788e: ruthantoniades@laborhealthalliance-ny.org