One More Strand Unravels

Posted on | September 27, 2007 | Comments Off on One More Strand Unravels

How GM’s decision to turn over its benefits program affects the health insurance safety net

Today’s news about GM’s settlement with the United Auto Workers raises huge questions about the future of American health care and American families. GM has essentially pulled out of the business of providing long-term health benefits to its employees, creating a special trust (a VEBA or Voluntary Employees Beneficiary Association) with the UAW managing future distributions for members’ health care. Other automakers are expected to follow this course of action — which accelerates a trend by employers of reducing or discontinuing their health insurance programs. Where does this leave American workers? More exposed than ever, when it comes to insurance. The safety net created by our employer-based insurance system is rapidly unravelling (only 60% provide coverage compared to 67% a few years ago). It’s too bad we’re in the state we are, but it’s not surprising that we’ve arrived here. Employer-based insurance is really a kind of accident that we never took the time to fix. I recently wrote an essay that explains how we got into this mess — read it here…And keep your eye on the news in the next few months. Our health insurance system is about to experience a massive shift.

Mike Magee