The auto industry bailout is stalled. Opponents can't seem to decide what's most objectionable: the lack of punishment for bad planning, or the idea that taxpayer money is being used to pay decent wages. There's a proposal to force UAW workers to accept the wage levels paid in the US by foreign auto companies, but that only amounts to about $3 per hour or so. The average cost for employee health care in the US is more than that.
So here's another idea: Let's have the government assume the cost of providing health care to auto workers, and have it take the lead in deciding how those health dollars are spent. The financial picture for these companies would improve significantly if the government pays these costs for five years. And imagine what would happen if Tom Daschle directed the autoworkers health plan in his dual role as HHS Secretary and health reform chief. He could ensure that taxpayer dollars are being spent wisely, and he could build a working model for the reformed healthcare system of the future.
Come to think of it, those 2.5 million workers that will be working for the President's infrastructure program could be part of this new health plan too.
Here's one reason why this idea makes sense: Unlike other types of bailout, especially in the banking sector, a large portion of the health insurance dollar is spent in the first year of coverage. That means that most of this money will recirculate into the economy immediately, creating a short-term stimulus effect.
The automakers have some immediate cash needs, especially for $10 billion in outstanding bills. It would be reckless to allow these suppliers to go under. But overall, the numbers suggest that a plan like this could actually work. Here are some back-of-the-envelope calculations:
And look at what else we would get. Secretary Daschle and his team could use this process to build a model Data Exchange and health purchasing process. Even more innovative programs could be carried out, too, especially in Michigan (where 149,000 of the Big Three's workers live). Electronic data records, online and in-person wellness programs, "medical homes," new incentives for providers and enrollees -- Michigan can become the breeding ground for new ideas, and the autoworker health plan can become the incubator for health reform.
What happens if you add 2.5 million infrastructure workers to the mix? You have a nationwide canvas for sketching out new reform ideas before rolling them out to the nation as a whole. Then there is the problem of retired autoworkers. The unfunded liability for their health care has been estimated at nearly $100 billion. These retirees could be folded into the plan, too.
What are the objections? Some will say that this is government-run health care. But the government will be paying for it anyway, no matter what happens. So why not manage our money wisely? And the President-elect's reform proposals don't call for single-payer, but for a blend of insurance programs. Even with government oversight, it will be a private-sector initiative. (I'd vote for a Medicare coverage option, though.)
There are also those who will object because it doesn't punish the car companies enough for their bad decisions. That's a discussion for another day, but here's a thought: The car companies may deserve punishment for poor management, or for not building cars people want. But the credit crisis is not of their doing, and the lack of car loans is what's hurting them most right now. The "serenity prayer" fits here: The car makers should change what they can change as a condition for aid. But there are some things that are beyond their control. We taxpayers, the ones who are bailing them out, should have the wisdom to know the difference.
Paul Krugman says that the current geographic concentration of the auto industry can't continue, and he's undoubtedly right. But that doesn't mean the transition can't be managed wisely and imaginatively, especially where employee health is concerned. And if we're paying the bill, why not use our money to leverage some real change?
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RJ Eskow blogs when he can at:
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That $12,000 represents an entire benefit package which includes pensions/401k, education training, paid vacation, holidays and sick time.
I recently wanted to negotiate salary for a new job. I have health insurance and so I wanted to be compensated with money. I was shocked to find out that the average rate paid for health insurance by midsize companies is only $2400 a year. I went online and did more research and I found that an individual policy with Oxford with drug coverage cost close to $13,000 a year but if I purchased a similar Oxford plan through HealthyNY (a buying group) I could pay a little less than $3600 per year.
http://www.uaw.org/barg/07fact/fact04.php
Provides additional facts on health care and the auto industry. Please note that new employees can only get HMO or PPO insurance and there are some retirees that receive less than $8000 a year as their pension. Also, a separate fund has been set up to offset the cost of retiree benefits.
I think it is safer to say that the corporations are paying probably closer to $3000 for actual health insurance for a total of about $75 million dollars per year.
Bottom line - paying for their workers health insurance won't be enough. They will try to end paid holidays, paid vacation, paid sick time, education, training, etc.
BTW - I wonder what kind of health insurance the CEOs have. I doubt they are in HMOs
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:HR00006:@@@L&summ2=m&
Subtitle B: Improved Vehicle Technology
"Directs such Secretary to establish a program to provide up to $25 billion in loans for the costs of such activities. Requires loan applicants to provide written assurances that laborers and mechanics employed by contractors or subcontractors during construction, alteration, or repair financed by such loan shall be paid wages at rates not less than those prevailing on similar construction in the locality."
This has nothing to do with health care other than Detroit playing a game to get what they have been after for many years - stop paying health care costs. it is because they are greedy not needy.
The power to regulate society must be taken away from the captains of industry, those who have shown themselves to be the captains of our Titanic, steaming full speed ahead into the icefield of this financial disaster.
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The only reason to do some half-assed, introductory program is fear of Rush Limbaugh. Give us a break.
It's propaganda, my man! It's funded by the vicious circle of Big Pharma and Big Insurance and the Imperial AMA.
As to there being "little" that pharmaceutical companies can do about development costs, you'd be surprised. A ridiculous number of drugs are re-released for new indications, sometimes even creating entirely new diagnoses, so that patents can be extended and/or renewed. (Case in point: Zoloft, originally for depression, is now recommended for "social phobia".)
As for doing away with clinical trials, Pharma has been successfully suppressing negative studies for years. Many have been pushing to create a clinical trials registry, so that the results of ALL trials must be published. This will prevent another vioxx controversy, where the company successfully marketed a medication for years despite having internal evidence from its own clinical trials of an association with heart attacks.
I think you're a little confused as to who is the b**ch and who is getting slapped.
The "blend of insurance programs" you describe as Obama's reform plan is a loser. The "conservative" propaganda machine loves to screech about "Government bureaucracy," but the current system is a massive bureaucracy of moral bankrupts who are able to internalize a primary objective of DENYING care to maximize profits. How could a substituted government bureaucracy be worse? Just add a re-employment plan for the grunt insurance adjusters who so need to be re-finding their souls somewhere!
The mathematical model is yet to be invented which makes a coherent economic argument in favor of private, for-profit health care insurance. No one can figure out how to justify bureaucratic duplication, payroll overhead, office space, clerical overhead imposed on providers, dividends for stockholders and those obscenely generous administrative packages.
Meanwhile, Medicare quietly goes about its business, making an absolute mockery of private health insurance.
I don't get the common viewpoint among Americans that national health is too expensive, & providing health care to all would somehow deflate the productivity of workers - while the wage & benefits packages of union workers are decried as some sort of drain on capitalism because they take up a larger proportion of American automakers' budgets compared to foreign automakers' budgets (glossing over the fact that automakers in nations with national health don't have to purchase expensive health insurance from for-profit corporations). If we don't provide national health care to all (including auto workers), and cut the benefits and wages to auto workers, what happens to auto workers and their family members who get sick?
The sad part is that labor is not the automakers problem. Toyota has been making the Prius for a decade and we are making Hummers.
without making the structural reforms our health care system
needs, we will be pouring money into a broken system--
throwing good money after bad.
Over two decades of research done at Dartmouth shows that
$1 out of $3 healthcare dollars are wasted on unnecessary
treatments and hospitalizations, redundant tests, and ineffective,
unproven new drug and procedures that often are no better than the
products and services that they are trying to replace.
This isn'; just costly--it's hazardous waste--hazardous to our health.
By throwing money into this system, we'll be "stimulating" the economy in
the sense that we will be growing the most bloated, most lucrative parts of
for-profit healthcare--rather than giving people the prevenitive care and
chornic disease management they need. (Because preventive care and
disease management are not lucrative, our money-driven system
skimps in these areas.)
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Scroll down to read my post here on Huffington about all of this-
"On Health Care Reform Stimulating the Economy: The
Example of Massachusetts"
700B$ for nothing.
:-)
Healthcare dollars are fnite--and before "bailing out" people who are earning more than median income, we should focus on the poor.
SCHIP needs to be expanded, and we need to give the states more money for Medicaid. Our youngest and poorest should be our first priority.
Secondly, Medicare is going broke. IT's hospital fund has been paying out more than it takes in in taxes for several years. The average Medicare recipient earngs $20,000 a year (that includes Social Security, dividends, capital gains, every penny that comes in.)
That's significantly less than autoworkers. Meanwhile co-pays and deductibles for Medicare have been soaring.
Medicare is in the best position to experiment with new ways reforming the system by paying for quality, comparing the effectiveness of treatments when deciding on co-pays and fees for doctors. And Medicare has the clout to stand up to the lobbyists.
Auto-workers should get unemployment insurance, job training, and if they are truly broke, Medicaid. But by and large, they are not the neediest people in America.