If someone works for New York City and is a member of the United federation of Teachers, one becomes very cynical in a hurry. After all, every move looks like it is benefiting the elite at the top of the Department of Education or union pyramid while bad policy is dumped down on the rank and file and the students. Because of this I am very suspicious about the new healthcare cost savings but if we take a close look at the current increases in co-payments for GHI and HIP subscribers, this is a deal that Michael Mulgrew alone cannot be blamed for.
It is the entire 250,000 umbrella group known as the Municipal Labor Committee that made healthcare savings part of an agreement with the city to help fund the pattern setting meager contractual raises of 10% over 7 years in 2014 that all city workers are stuck with (uniform unions received a little more). All the municipal unions, except two, agreed to the healthcare cost savings. The UFT was not alone in giving back here and getting little in return.
In addition, the UFT, the city and even some of our friends will tell us that the Affordable Care Act is potentially a big part of the problem as this piece from the Huffington Post shows. Although it has already been pushed back until 2020 by Congress and might never see the light of day, the Obamacare Cadillac Tax would charge anyone with a health plan that costs over $27,000 a year a 40% tax on the part of the healthcare plan that goes over that amount. Many are skeptical that the tax will ever become a reality since it is strongly opposed by unions and the majority of the Congress is against Obamacare .
For the record my W2 says the city paid $21,000 for my health plan last year so I am almost in a Cadillac plan. My wife -a NYC teacher too - only cost the city $2,400. City workers don't get extra health benefits from the city if their spouse is a city employee.
The idea of the Cadillac tax is to get employers to cut down on healthcare costs. What will they do with the money they save on premiums? Theoretically, they will increase wages. In reality, employers would more than likely just shift more healthcare costs to employees via higher co-pays and larger health insurance premiums. NYC is doing both.
The Huffington Post piece says this:
Len Burman, director of the Urban-Brookings Tax Policy Center, noted that most economists believe the tax would ultimately raise wages, since employers would be putting less money into health insurance premiums.
But one other objection to the tax is that workers won't actually see those gains at least not right away. Unions in particular, have said that their workers simply end up with skimpier health insurance, typically in the form of higher co-payments or deductibles -- and that they can't get better wages in return. At a time when consumers worry as much about out-of-pocket expenses as premiums, that argument resonates.
Yes it certainly does. Our plan in New York City is quite good but it will continually worsen as time goes by unless the MLC stands strong against the tax. Since I have been working, I have seen health insurance cover less while co-pays keep rising. To be fair, we city workers have it better than most however sometimes I just dream about working in Paris where there would be a general strike if the government dared to threaten people's health benefits. I know I'm crazy to even conceive of this outrageous thought on this side of the Atlantic since even contemplating union action here is so beyond the realm of possible.
I can't help but thinking that the latest increases in co-payments for GHI and HIP subscribers - the vast majority of city workers - was planned in advance to be kind of onerous so hopefully we would all go into managed care at Advantage Care Physicians or more broadly it would lead to us accepting paying a share of healthcare premiums when the next round of $1.3 billion in health savings comes due next year.
Instead of just increasing co-pays in 2017, the city and Mulgrew might come to us and say we all have to share the pain equally as we cannot continue to put the cost burden for the required savings on our sickest members who have chronic conditions and use the system the most. A union solidarity argument could be made to ask us to swallow a 1-2% healthcare payroll deduction to pay for part of our benefits. We will be informed that we are helping the neediest among us and we all must pitch in to care for them.
Who would not be persuaded by that argument? I'm already feeling guilty just thinking about how to oppose it. Here is that Board of Education/UFT/municipal worker cynicism coming out of me again. This giveback could just happen and many would be happy about it.
If we want to fight the whole system and say everyone deserves a Cadillac plan that we should all pay for - or at least a good Chevy plan - (I believe it's called single payer), we will be told we are dreamers or that we should shut up so nobody notices how good New York City workers' benefits are.
Oh and where is Mulgrew at fault on all of this? He negotiated the abysmal pattern setting deal and apparently the health savings too. I am OK with cost savings but we should have been told about what our part would be right up front. Mulgrew should have leveled with us before the contract was voted on in 2014 and told us specifically what the the potential health benefit cuts, higher co-pays and/or payroll deductions would be before we voted on the contract.