The big three will soon be the not-so-big three, expecially if their legacy health care cost problem is not resolved soon. I’m referring to the domestic US auto industry, where legacy health care costs have been crippling GM Ford and Chrysler for years. And the worst is yet to come.
Chairmen of all three stopped into the White House to plead their case yesterday, and were met with the usual “we’ll get right on studying that problem.”
One of the more interesting proposals advanced by the auto chairs is a reinsurance pool to cover catastrophic claims.
And even more interestig was the hopeful tone struck by GM’s Rick Wagoner when he noted that the new Democratic majority appears interested in helping employers struggling with health care costs.
What does this mean for you?
When big manufacturers get behind major changes to the US health care system, we’re closer to finally attacking the problem.
Nov
15
As usual, the Big Three suggest a partial solution to their healthcare legacy costs (reinsurance pool for catastrophic expenses) that would shift much of these costs to someone else – employers with younger workforces, small businesses that can’t afford to offer their own employees health insurance at all, and taxpayers generally. With a huge number of retirees and an older than average active workforce, the auto companies would obviously be clear winners under a reinsurance approach.
I think their suggestion might have more credibility, however, if they endorsed a large carbon tax and/or a gasoline tax to raise the revenue needed to get us to universal coverage, mitigate global warming and reduce energy consumption (and dependence on foreign oil) at the same time. Imagine a large industry saying here is something we support because it’s good for the country in the long term even though it might hurt our business in the short term. I won’t hold my breath waiting.
It was interesting to read the two versions of this story from The Detroit News and The Detroit Free Press.
The Freeps version was less hopeful, spotlighting CEO Wagoner’s remarks at the post-meeting press conference. He found a very smiling and polite way to say that the administration doesn’t get it.
Remarking that the auto execs told the President more government attention needed to be paid to catastrophic cases, the sickest 1% of patients who account for 30% of the nation’s health care bill, Wagoner’s assessment of the President’s response was, “I can’t say … he saw it exactly our way, but he’s willing to look into that.” Sounds like Bush is not exactly leaping to slide down the firepole.
The Detroit News, on the other hand, pointed out what Joe notes here, that the execs were hoping to get some love from the Democratic Congress from a meeting in December.
While I agree with BC’s assessment, I have to wonder, though. We are in transition from an manufacturing to a service-and-information economy. How accommodating to the automakers might Washington feel it needs to be? Wouldn’t it carry more weight and urgency if such entreaties were coming from, say, Google, Microsoft and Wal-Mart than GM, Ford, and Chrysler?
Hi BC, I am really wondering why you think the government would do a better job at healthcare? I have lived through Tenncare in Tennessee, and I can tell you that the government can’t handle the task. Look into Tenncare and the history of it.
As an employer, healthcare is just not that expensive. The excessive cost for employers of healthcare has just been blown out of proportion. The HSA option is a great one, and consumer directed healthcare is the answer, not government intervention.