GM Goes Full Circle on Employer-Based Health Care

Posted on | November 14, 2007 | Comments Off on GM Goes Full Circle on Employer-Based Health Care

An aging corporate giant points us in a new health-care direction

It’s probably fair to say that as General Motors goes, so goes employer-based health care in the United States. After all, GM’s 1950 agreement with the United Auto Workers (UAW) was the first to build extensive health care and retiree benefits into its basic contract with employees – a model that became the corporate norm for the decades that followed.

But 2007 is a long way from 1950. The world has changed, and there is new writing on the wall for employee-based health care. That’s why GM’s decision this fall to transfer control of health benefits to a trust managed by the UAW – essentially pulling itself out of the benefits game – says so much about where we are headed as a nation.

The UAW now assumes control of the $32 billion trust, which will ensure health benefits for its members. But nothing changes in terms of our health care system itself. The UAW will face the same problems everyone else does with our health system – rising costs, inequities of care, poor infrastructure and lack of long-term planning.

In short, GM’s decision – one that is sure to be emulated by others in corporate America – helps it become more profitable as a company, but it’s an incomplete solution in terms of our overall health as a nation. Shifting health care benefits from employers to another model – whatever that might be – is a first step, but it’s certainly not the last. It took us a long time to get to this watershed moment, but we’ve still got a long way to go.

To learn more about GM’s decision and what it means, be sure to watch this week’s video (embedded with this blog post) or read the full transcript of this week’s program, below. Do you have a story to share about your experience with employee-based health care benefits? Please post a comment – I would love to hear from you.

Mike Magee