Health Care on AFL rank and file are increasingly wary of the VEBA (Voluntary Employees Beneficiary Association) proposed by GM, Ford and Chrysler, for the purpose of ridding their corporations of the health insurance drag. They worry that the plan may go broke, as did similar plans set up for Caterpillar and Detroit Diesel in the 1990’s. The VEBA would take $100 billion off the automakers books and in return the big three are proposing to fund the trust at 60% to 70% of these projected costs. United Steelworkers, the representing union, for Goodyear Tire and Rubber employees, recently negotiated a VEBA that Goodyear will fund with $1 billion in cash and company shares. Since a VEBA is a trust fund that earns by investing, the danger exists that if the investments go south, the VEBA risks going belly up leaving workers with nothing. That is what happened with Caterpillar and now the legal system hums with lawsuits to determine just who is going to provide the retirees with the health care plans they were promised.
Writing in the NYT, David Brooks claims that the old employer based benefit contract, born in the 1940’s, is no longer a viable arrangement for health care funding, and states that this issue of funding will become the primary domestic debate of the near future. He dismisses the “liberals” who chase an elusive Single Payer plan.
Some liberals, believing that government should step in as employers withdraw, support a European-style, single-payer system health care system. This would be fine if we were Europeans. But Americans, who are more individualistic and pluralistic, will not likely embrace a system that forces them to defer to the central government when it comes to making fundamental health care choices.
Well, I don’t know what planet he lives on, but here on Earth there are about 47 million pluralistic individualistic Americans who would simply like to have fundamental health care. The rest of us have been trained by insurance to accept what they give us and, if brave enough, fight for what they owe us.
But Brooks is not alone with this proposal. He draws his opinions from the Heritage Foundation framework and cites in particular, Stuart Butler, a vice-president at Heritage. Participating in a social policy project coordinated by the Brookings Institute, and called The Hamilton Project. Butler’s vision [http://www.brookings…] calls for basic security while demanding reciprocity, ie, if you contribute to society, you are protected from catastrophe. He wants to foster personal responsibility, stimulate private savings and calls for self-insurance from those who can afford it. He would like to form “insurance exchanges” that could be sponsored by entities such as unions and churches that we would join according to our preference. Then he pretty much recommends that we be sorted and slotted according to our ability to pay and proceed from that point with an insurance plan according to means. And although he doesn’t come right out and say it, it is clear that he wants to turn Medicare into a means tested program also. Brooks calls it The New Social Contract. It is probably the get business off the hook for employer health benefit contract.
But whatever it is called, VEBA seems to be a pathway to this goal. The UAW contract with the big three expires on September 14. If the UAW goes VEBA, look for that to become a trend. Vacuums will open up in health care administration and the conservatives are already prepared to fill them.