U.S. unions move toward health-care reform deal


By Nick Carey

CHICAGO, June 24 (Reuters) - As rising health-care costs hurt workers and retirees alike, America's trade unions are seen inching toward a broad-sweeping agreement with U.S. corporations on health-care reform.

"There is a growing recognition among unions that they can't count on health insurance forever," said Joe Minarik, director of research at the Committee for Economic Development, a Washington-based business lobby.

"Like many corporations, the unions know a meaningful solution requires working together," Minarik said.

The CED is part of the Better Health Care Together coalition, an unlikely mix of major companies such as Wal-Mart Stores Inc. and unions that are usually at loggerheads on labor issues. It was set up to find a compromise solution on universal health care that is palatable to both business and labor.

Specific proposals on the ground are thin, but universal coverage is expected to be funded jointly by employers, employees and the U.S. government -- creating a solution that falls somewhere between the current private sector dominated U.S. system and Canada's state-funded health-care program.

Although unions have long publicly supported universal coverage, during the last abortive attempt at U.S. health-care reform in 1994 led by then-first lady Hillary Clinton some unions focused more on defending their own hard-won private benefits than backing universal coverage, said Jacob Hacker, a political science professor at Yale University.

"For decades, unions used health-care benefits to promote membership," said Hacker, whose 2006 book, "The Great Risk Shift," examines the erosion of financial stability for American families. "But times have changed."

Americans have seen double-digit annual health insurance cost increases in the past decade as employers have passed on some of the burden. The National Coalition of Health Care estimates the average annual premium for an employer health-care plan for a family of four is nearly $11,500. The employee pays $3,000 of that total, the bipartisan group says.


Health-care costs have eroded profits to the point where many major U.S. companies -- such as General Electric Co. and AT&T Inc. -- have spoken out on the U.S. health-care crisis, saying reform is urgently needed.

Soaring costs have also hurt workers. JoAnn Volk, a health-care lobbyist for the AFL-CIO trade union organization, said many low-paid workers have "health-insurance policies in name only, which do not cover most services."

Also, according to the U.S. Census Bureau, some 45 million Americans have no health insurance coverage at all.

And with American labor unions suffering declining membership -- U.S. Bureau of Labor Statistics data showed 12.5 percent of Americans belonged to a union in 2005, down from 20.1 percent in 1983 -- this audience with little or no health coverage is seen as ripe territory for union recruitment, as the unions argue they backed reform on behalf of all Americans.

Health care is now a major issue for U.S. trade unions, particularly in sectors like the domestic automobile industry, which faces vast retiree health-benefit costs. Ford Motor Co. officials say health care adds $1,200 to a vehicle's cost, about $600 more than that of its foreign competitors.

"Health insurance is a crucial issue in every contract we negotiate," said United Steelworkers' spokeswoman Barbara White Stack.

The AFL-CIO's Volk said that "providing universal coverage for all Americans is a top priority for us."


To find a way to provide coverage for everyone , some groups like the Service Employees International Union have joined the Better Health Care Together coalition -- which calls for universal health coverage by 2012 -- even if it means aligning themselves with longtime corporate foe Wal-Mart.

"We don't like their (Wal-Mart's) business model, we don't like their labor practices," SEIU spokesman Eric Hauser said. "But we want to build a groundswell of support for reform so broad, Washington has no choice but to solve this crisis."

"We must work together for the national good," he added.

Mark McClellan, a senior fellow at the Brookings Institution, praised the "more consensual approach" of some unions in "calling for a solution a broad range of groups can get behind."

The Better Health Care Together coalition, however, has been criticized for providing no specific proposals on reform.

Spokeswoman Amy Weiss said the coalition's proposals were deliberately vague as it was the best way to get the "strange bedfellows" of labor and business to start talking.

Accord on health reform may include labor groups toning down demands U.S. corporations could not accept, said David Cutler, a professor of economics at Harvard University.

"In the past, the unions have been less than completely constructive by insisting on very generous benefits," he said. "There is a growing realization reform won't provide everything the unions want."

If a solution is achieved, however, some observers see an opportunity for the unions to gain members in largely untapped areas like the retail sector to offset the falling membership as the U.S. manufacturing base declines.

"The unions know service sector employees are the future," said Yale's Jacob Hacker.

Roger Hickey, co-director of Washington-based liberal group Campaign for America's Future said unions could use health reform to recruit low-paid workers who have no coverage now.

"If universal health care is introduced unions could say to potential members, 'Hey, look, we won you that,'" he said.



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