
By BARRIE MCKENNA
Tuesday, January 21, 2003
Page B9
WASHINGTON -- The last time General Electric Co. workers felt passionate enough about anything to stage a national strike was 1969 -- the year of Neil Armstrong's moon walk, Richard Nixon's first inaugural and Woodstock.
Last week, nearly 20,000 GE workers in 23 states walked off the job again to protest a company plan to bill them hundreds of dollars more a year for health care coverage. The historic show of defiance is part of a wider crusade against skyrocketing health care costs across the United States, GE workers said.
"This fight isn't just for us," Andy Gnoinski, a GE plant worker from Schenectady, N.Y., told ABC's Good Morning America. "This fight is for everybody in America, especially those that don't have health care."
Working Americans have always fought their employers over pay, pensions and working conditions.
But in the past year, health care has emerged as a deal-breaker in thousands of workplaces across the United States as companies scramble to cope with a fourth straight year of double-digit hikes in their health insurance premiums. Premiums are expected to jump another 15 per cent or more in 2003 -- nearly eight times the core inflation rate.
Companies have responded by raising worker co-payments (as GE is proposing), cutting benefits or adjusting wage increases to pay for higher premiums. Nearly half of large employers said they plan to raise payroll deductions this year to offset higher costs.
One way or another, employees are likely to have to pick up a greater share of the rising tab in the years ahead, remarked Henry Aaron, senior fellow in economic studies at the Brookings Institution and a former top U.S. health official.
"Employers are reacting to the shock by trying to offload some of those costs on workers," he said. "And even if they don't, employees will pay for the benefits gradually through receiving smaller increases in cash wages or other benefits." The United States may be on the brink of a dangerous new health care crisis, which could force the issue to the top of the national agenda by the 2004 U.S. presidential campaign, according to Mr. Aaron.
The country's gold-plated system provides the best care in the world for some, but too much care for others and no coverage at all for nearly 40 million Americans.
Even with employer subsidies, workers can pay anywhere from $1,000 (U.S.) to several thousand dollars a year to insure their families. They may also have to cover the cost of dental, drug, eye and mental health care themselves.
Companies are suffering, too. GE, for example, said its own health care costs have soared more than 45 per cent since 1999 to $1.4-billion, or $2,350 for each employee.
Total U.S. spending on health care hit $1.4-trillion in 2001, after rising at the fastest rate in more than a decade. The system now soaks up 14 per cent of the country's gross domestic product. Canada, by comparison, spends roughly 9 per cent of GDP.
The concept of universal health care, considered heresy after the humiliating 1994 failure of the Clinton administration's reforms, could soon make a comeback on the national agenda, Mr. Aaron predicted.
If Canada's health care system suffers from underfunding and inadequate services, the United States is now plagued by too much health care.
The past decade has witnessed an explosion of costly new drugs, treatments and technology, and everyone wants the best, Mr. Aaron pointed out.
Yet, unlike Canada, there's no mechanism to limit the availability of those costly new services, resulting in too many people getting treatment they don't need and can't really afford, he said.
GE's two-day walkout could be a prelude to years of acrimonious labour relations and noisy political debate. Health care has already been a key issue in contract talks at the New York City Transit Authority, Hershey Foods Corp. and Navistar International Corp. It's also expected to be pivotal in looming talks between the Big Three auto makers and their workers, and between truckers and the International Brotherhood of Teamsters.
Retired autoworkers complain that constant increases in their health co-payments amounts to a real reduction in their pensions.
And many non-union workers are facing similar demands from employers. Ford Motor Co.'s 50,000 white collar employees, who until this year had enjoyed free health coverage, began paying up to $150 a month for the privilege earlier this year.
Last week, U.S. President George W. Bush waded into the health care debate, blaming malpractice awards for the rising cost of health care -- a causal effect that most health experts dispute. Mr. Bush has launched a push to get the U.S. Congress to cap malpractice wards at $250,000. The current average is $426,000.
The opponents of health care reform in the mid-1990s argued that the private system of managed care companies and corporate insurance would keep a lid on costs by bringing private-sector discipline to the delivery of health care. Instead, costs levelled off for a while, and then began rising again.
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