Save This?
Earlier this summer President Obama said to the American Medical Association:
If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.
Tell that to the 75 employees of SK Hand Tools represented by Teamsters Local 743.
SK Hand Tools unilaterally terminated their health insurance.
My congressman, Chris Van Hollen, recently held a telephone “town meeting” on health care.
He commented at the beginning that our current employer based system is the “foundation” of our current health care system.
If this is the foundation, something is about to topple.
Why isn’t President Obama stepping in to help those Teamster members keep their health insurance?
According to news reports, the company provided no advance notice. The employees only found about it when they noticed that the usual deduction for health care was missing from their paychecks. Some learned about when they went for services and were told that the doctor or dentist who would no longer treat them unless the members were prepared to pay cash.
According to the Chicago Sun Times and other news sources, one worker learned of his uninsured status only after a $20,000 emergency hernia surgery.
The average wage at SK Tools is $14/hour, and the employees have not had a wage increase in six years. Now the employer wants the workers to take a pay cut AND pay for their health insurance.
Why would SK Hand Tools drop coverage like a hot piece of steel? According to Crain’s Chicago Business
An SK Hand Tool spokesman said in a statement that the company was forced to eliminate health care coverage for reasons beyond its control.
“We realize that employees want to have health care and we wish that we could provide them with coverage,” the spokesman said.
He said the company was “experiencing a downturn” in its business and is “looking to streamline our cost basis throughout the organization.”
The American Benefits Council, a leading advocacy group for employer sponsored benefit programs, refers to the “solid foundation of the employer-based health care system that now serves as the primary source of coverage for most Americans” in its report on health care reform Condition Critical.
Is SK Hand Tools an example of that “solid foundation”?
Why do employers and their spokes people cling to a system of employer sponsored health care?
They really don’t want the responsibility.
At every bargaining table over the last 20 years employer demands are the same – employees need to pay more for health care and employers need to provide less.
Employers don’t want this responsibility. They try to shift the costs to their employees through increased premium sharing, increased co-pays, reduced benefits, and tighter provider networks that curtail freedom to choose a doctor.
Why don’t they just give it up?
They need to shed their ideological blinders and realize that the system of employer-sponsored health insurance is the problem.
SK Hand Tools is no different from any other corporation in America. They need to earn profits to stay in business. But if their competitors don’t have the cost of health care in their cost of goods sold, they are more than willing to shed that cost – and the workers be damned. It is race to the bottom. And they will drag the American economy with it.
When many local chambers of commerce and the National Federation of Independent Businesses make money selling health insurance to their members, can they really be trusted to represent the interests of their members on this issue.
Employer sponsored health care distorts competition. It impedes corporate agility. It restricts workforce mobility. It stifles new business creation.
This last point is made by economists, including Jonathan Gruber of MIT. In the Pittsburgh Post Gazette he said:
“Some of tomorrow’s potential entrepreneurs are today’s employees at firms that provide health insurance. They may have powerful new ideas that will build the firms of tomorrow,” Gruber said. “But if they leave their current job to work on those ideas, they may find themselves without access to reliable health insurance.”
Who knows? Maybe some of those workers are walking the picket line in Chicago right now?
Meanwhile American business needs to break its addiction to a policy that is destructive to its own interests, the interests of its workers and the interests of the American economy.
