Why Big Labor Doesn’t Want National Healthcare

A New York Times op-ed by pro-nationalized healthcare Robert Fitch, “Big Labor’s Big Secret,” argues in favor of U.S. automakers reducing their costs by $1,300 per vehicle by enacting a nationalized health plan. Fitch points out, however, that big private unions, and health providers and insurance companies, profit too much from operating their own health plans, so are not in favor of losing this cow of legal and shady aggrandizement. As Fitch says,

“most [private-sector unions] have created huge companies to administer their workers’ plans, giving them a large and often corrupt stake in the current system.”

In 1990, I audited the voluntary health benefit plans offered by a major union’s local. There were about three-dozen such offerings, most duplicative, of overpriced-underbenefited policies for odd diseases and treatments, from which substantial “administrative fee” commissions were paid the union local, and several union employees garnered employment to process. I recommended replacing them all with three or four better plans, allowing also the elimination of the several union processors. One of the major insurance providers ran to the union local president reminding him of the amount they paid into his treasury. I was immediately fired, none of the lousy plans were eliminated, and the fees and jobs continued. Workers’ welfare be damned.

Lest anyone think that I am reflexively anti-union, I come from a union family. It’s ingrained in me that I have never crossed a picket line, though this is more in solidarity to the very elderly among my family who led and participated in early unionization.

My previous three posts (here, here, and here) on the excessive costs from public unions’ pension and health plans bankrupting state and local governments reflect more on our elected representatives’ irresponsibility in thinking they could electorally profit from these overcozy deals and pass the costs on to present and future taxpayers, and less on union leaders whose role is to negotiate for the most they can get.

Similar insensitivity obtained among private companies’ leaders in allowing cushy pension and health deals. Granted in return for labor peace at an earlier time when the pricing of their products was not subject to foreign competition, so the costs could be passed on to consumers, these plans are now bankrupting our largest companies, the auto companies most noticeably.

The response during the early ‘90’s from our largest corporations was to initially support Hillarycare, to pass these costs over to the taxpayers. The largest insurance companies also initially agreed, to pass their claims liabilities on to the taxpayers while profiting from claims paying contracts with the government. The revolt by smaller insurance companies and insurance brokers, and among firmer Republicans and those seeking partisan advantage, derailed Hillarycare. Since, various legislation has driven most of the smaller health insurance companies out of many markets, and insurance companies have halved commissions to brokers who are now a less powerful political force.

So, large private companies are now fighting with their unions to trim benefits costs, under threat of bankruptcy proceedings. But, at the same time they are still quietly pushing for federalization of their legacy costs through nationalized health schemes.

There may now be little tax treasury momentum favoring them, but watch out if somehow the public’s tax treasuries' balances blossom due to strong economic growth or some other factor.