Soaring Costs Make Bargaining Tougher than Ever

Louise Novotny, CWA Research Director

In the bitter cold of February three years ago, 14,000 IUE-CWA members at General Electric took to the streets to protest the company's unilateral decision to slash health benefits. 

Another 4,000 members of other unions at the company joined them, stopping production at 64 GE facilities in 23 states. The 2003 strike was a major skirmish in a battle that is intensifying today for every union in the United States.

Even for union members with strong contracts, the soaring national price tag for health care means most union families are paying more out-of-pocket for premiums, doctors' visits and prescriptions.

For non-union workers, skyrocketing costs may mean no insurance at all: The percentage of companies offering health benefits fell from 69 percent in 2000 to 60 percent in 2005. In all, 266,000 firms dropped coverage and others pay so little toward insurance plans that workers' can't afford them.

"We have a national crisis on our hands and there's a lot of talk about it but very little action," CWA President Larry Cohen said. "What steps have been taken are steps backwards. Just ask any senior confounded by the Medicare prescription plan. It isn't saving most of them a dime but drug and insurance companies are laughing all the way to the bank."

Labor leaders, associations of doctors and nurses and millions of Americans agree: the only solution is one that provides universal health coverage for all citizens.

"It's a monumental, long-term goal, but we have to work toward it," Cohen said. "The key is making sure that our government and our employers don't make things worse for us in the meantime."

Rising Costs and the Uninsured
Some 176 million Americans get some or all of their health care coverage through their employers. The figure includes supplemental coverage for 15 million retirees age 65 and older who are eligible for Medicare.

The cost of coverage has risen dramatically — 73 percent — over the past five years. It rose by double digits each year between 2000 and 2004, outpacing the rate of overall inflation at least fivefold. The average cost of family health insurance — $907 a month — now exceeds the earnings of a fulltime worker earning the federal minimum wage.

More than 80 percent of the uninsured have jobs or are a worker's dependents. Wal-Mart is the most commonly cited example of a large employer that's not paying its fair share. In Washington State, for instance, more than 3,100 Wal-Mart employees — 1,800 of them full-time workers — have to rely on Medicaid and another state health plan for low-wage adults. The taxpayers' subsidy for the world's most profitable retailer costs the state more than $12 million a year.

Retiree Benefits Under Attack
Retirees who don't have unions fighting for them are in trouble today. Their employer-paid health care plans are being eroded or are disappearing entirely.

A survey of large employers who offered retiree health insurance in 2004 showed that 79 percent increased retirees' share of premiums in 2005, 45 percent raised co-pays and deductibles and 8 percent eliminated retiree health benefits for new hires.

In back-to-back announcements that rocked the business world late last year, Verizon and IBM — both financially robust companies — said they would freeze their pension plans and reduce or end retiree health benefits for management.

As of July 1, managers with fewer than 15 years at Verizon will never become eligible for retiree health benefits, though they can opt to pay for a plan themselves. CWA members at Verizon and those already retired won't be affected, but the company "may be setting the stage for concessions it may hope to gain from its unionized workers in the next round of negotiations," the New York Times reported.

Finding a Solution
CWA is using every tool at its disposal to defend against employers' attempts to cut benefits, and plans at the union's major employers still rank among the country's best.

Intense solidarity at Verizon locals up and down the East Coast, with members leafleting and rallying to draw attention, helped protect the workers' health care benefits during a bitter battle in 2003. The next year, retiree health care was among issues that led to a four-day strike at SBC.

In Albany, N.Y., TNG-CWA Local 31034 recently staved off an attempt to force new hires to pay 25 percent of their health care premiums, far more than current workers pay. In Jackson, Miss., the 3,000 state workers represented by CWA Local 3570 held onto their fully state-paid health insurance premiums last year after the legislature tried to rollback benefits. Future hires, however, will have to choose between paying part of their premiums or paying higher deductibles. "We had to compromise," Local President Brenda Scott said.

Currently, members of the Association of Flight Attendants-CWA at Mesaba Aviation — whose airline is in bankruptcy — are fighting to keep their share of insurance premiums from climbing dramatically. The company wants them to pay half, on top of other draconian cuts in wages and benefits. The health insurance alone would cost the lowest-paid worker $140 a month for single coverage and $370 a month for a family, leaving the most junior flight attendants with a monthly gross income as low as $571.

The National Coalition on Health Care released a study last year figuring the costs of four options for reform, each one leading to universal coverage. CWA is a member of NCHC, which is supported by such diverse groups as unions, businesses, social and religious activists, insurance companies and hospitals.

Rather than raise costs, each proposal would provide full care while saving at least $320 billion and possibly more than $1 trillion, economists estimate.                 

"As hard as we will fight at the bargaining table, the health care crisis is far too big to be solved there," Cohen said. "It demands that we all participate and pay attention to proposals like the NCHC's and that we elect leaders who will truly act for the public good."

Learn more about the NCHC proposals online at www.nchc.org.