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Laboring For Reform

Seeing Opportunity, Unions Step Up Fight For Universal Health Coverage

March 11, 2007
By DIANE LEVICK, Courant Staff Writer

Labor unions, long a voice in health care reform, have grown louder this year and influenced the debate enough to ensure that their ultimate vision of one big insurance plan - or at least coverage for everyone - is not summarily dismissed.

The Service Employees International Union and the AFL-CIO, among others, have stepped up legislative campaigns for health care and insurance reform nationally and on the state level, including in Connecticut.

Both organizations favor a "single-payer" system in which the government or a nonprofit insurance fund would provide coverage for everyone. But both also see themselves as pragmatists in the broad movement for reform, which includes insurance companies, major employers and consumer groups.

Even if the votes can't be mustered for a single-payer system, unions have helped sway the debate toward a larger government role in health insurance.

In addition to advocating a single-payer system, the SEIU is supporting less dramatic reforms in Connecticut. Nationally, the union - which includes workers in health care, building maintenance and the public sector - has sought common ground with Fortune 500 companies, joining such companies as Wal-Mart and AT&T in Better Health Care Together, a new national coalition for reform.

And although the AFL-CIO isn't endorsing specific bills, it's not actively opposing non-single-payer measures, either.

Labor's activism on health care policy stems from years of bargaining table talks, where workers' coverage has increasingly become the sticking point - as at Stop & Shop. The supermarket chain's 43,000 New England employees are scheduled to vote on a contract today.

The stars seem to have aligned for the unions' health reform efforts, with Democratic wins they worked for in last year's elections, growing employer desperation, and consumer fears over soaring premiums and shrinking benefits - or having no insurance at all.

Labor organizations have played a role in raising public interest in health care reform to its highest point in years, and they hope the strategy will help reverse the slide in U.S. union membership, labor experts say.

"Unions keep putting pressure on politicians" to pass reforms, said Jennifer Klein, a labor historian and assistant professor of history at Yale University. "They've made it an issue that is essential to talk about."

The Golden Ring

The mood in Connecticut and other states is for substantive action to help the 46.6 million uninsured - 300,000 to more than 400,000 of them in the state - and address the costly problems of people with inadequate insurance.

Many kinds of proposals are being floated, but it's uncertain what will emerge from this year's General Assembly. For the unions, a single-payer system remains the golden ring.

"It absolutely makes the most sense, but we're also realists and would not stand in the way of something that was less than single-payer," said Paul Filson, director of the SEIU Connecticut State Council.

The AFL-CIO hasn't shied away from using the term single payer, but other proponents have, citing the negativity it has provoked in the past that lingers on.

"People are freaking out just by the term single-payer alone," said Beverly Brakeman, director of the labor-community coalition Citizens for Economic Opportunity. "Legislators are resistant to that term because it conjures up long lines in Canada and Big Brother health care."

But supporters envision single-payer as akin to traditional Medicare, in which the government pays for health care for people 65 and up and certain disabled people and hires private firms to process claims.

Single-payer is more politically viable this year than in recent years because of Democrats' increased legislative power, and "employers now understand there is a crisis and are willing to be equal partners in finding the resolution to that crisis," said Jonathan Cutler, an associate professor of sociology and labor expert at Wesleyan University.

The SEIU worked hard to mobilize people in support of Democratic candidates, and health care reform is "the single largest payback issue" for the union, Cutler said.

One bill favored by the SEIU and the Universal Health Care Foundation of Connecticut is meant to create a single-payer system here called the Connecticut Saves Health Care program.

The bill, aired in a legislative hearing last week, would create a single health plan with benefits typical of what New England employers offer that would insure all Connecticut residents.

They would have to belong to the plan, but they or their employers could buy supplemental coverage.

The state would be self-insured, paying health care providers through a hired company that processes claims, said Stan Dorn, senior research associate at The Urban Institute in Washington. The Universal Health Care Foundation hired him as a consultant.

The plan's funding would come from employers above a certain size, which would contribute a percentage of payroll, Dorn said. Individuals would pay for coverage on a sliding scale, based on income.

Criticizing Insurers

Supporters of a single-payer system say it can reduce health care spending.

The biggest savings, Filson said, would come from having a healthier population as previously uninsured people get needed care instead of ending up in emergency rooms.

Other substantial savings would result from cutting out wasteful bureaucracy of insurance companies, union officials say.

They point to how Medicare spends a few cents of every dollar on administrative costs, while it's not unusual for a private-sector insurer to spend 20 cents of each premium dollar on administration and profits.

Insurance companies, however, say those administrative costs include programs to manage chronic disease, keep people healthy and bring technology to bear on those efforts.

The Connecticut insurers, in coalition with the Connecticut Business and Industry Association and some large employers, oppose single-payer, saying it would require "extraordinary redirection of public and private funding and create a new governmental bureaucracy."

Insurers have a lot at stake in the reform debate, and single-payer advocates acknowledge that a national system could mean massive job loss in the industry. Even a state-level system would result in some layoffs in Connecticut.

Proponents say people could be retrained and find other jobs.

"I wouldn't at all feel sorry if the CEOs, the upper management of insurance companies and HMOs, took a big hit," the SEIU's Filson said. He said it's "unethical and obscene" what they make and how they make it.

"They make it by denying people health care and making more profits and not paying claims and by cherry-picking healthy people," Filson said.

Insurers could still have a role, such as selling policies to supplement the single-payer plan, said Lori Pelletier, secretary-treasurer of the Connecticut AFL-CIO. Filson notes that the state plan could still hire insurers to process claims and provide services that manage care.

Even if some insurance workers are displaced, the state would gain jobs in the long run once employers don't have to deal with health insurance themselves, Filson said.

"It would be an enormous incentive to grow jobs in Connecticut," Filson said. "I think it would put Connecticut at a huge competitive advantage over every other state in the country."

An earlier version of the Connecticut Saves Health Care plan was projected to add 6,000 to 11,000 new jobs in the state, Dorn said.

Hedging Bets

Even if single-payer remains hard to sell in the Insurance City, unions are optimistic about substantial reform.

The SEIU, for instance, is hedging its bets by supporting other bills, including one that would create a Connecticut purchasing pool offering multiple private health plans for people who aren't covered through their employers.

The union has 10 vision points on reform, such as guaranteeing affordable coverage for all Americans, rather than piecemeal measures.

Making sure the system offers comprehensive coverage with preventive care, and ensures a choice of doctors and health plans, is also important, the SEIU says.

The AFL-CIO's plea is for any reform to make coverage universal, affordable, accessible, portable and continuous, and "health enhancing."

It remains to be seen whether organized labor's focus on health care reform will help recruit members and stem the ebbing tide of union ranks. The U.S. union membership rate has steadily declined from 20.1 percent of workers in 1983 to 12 percent in 2006, according to the U.S. Bureau of Labor Statistics.

The SEIU, though, has increased membership. Its strategy for more gains is to reduce employer resistance to union organizing by shifting the responsibility for health insurance onto the government, Cutler said.

The thing employers fear most from unions is being saddled with higher health care costs, so "their strategy for bringing employers around is to take health insurance off the table by nationalizing it," Cutler said.

So the SEIU has allied with big companies for reform, but Cutler does not believe a labor movement can be built by organizing employers.

The strategy, though, "does have PR value," Cutler said. "They will claim credit for winning people a benefit. They'll make hay of it."