Health Care -- The Erosion of Employer-Sponsored Health Insurance

May 5, 2009

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, Ryan Powers, and Igor Volsky

HEALTH CARE

The Erosion of Employer-Sponsored Health Insurance

When Chrysler filed for Chapter 11 bankruptcy on April 30, the company granted the United Auto Workers union a 55 percent stake in the restructured firm. As a result, the Voluntary Employee Benefit Association (VEBA), the union's health care trust established by the Big Three automakers in 2007, "will own most of Chrysler's assets." But as Ken Terry of BNET Healthcare explains, the arrangement represents "another blow to the tottering system of employer-based insurance." The union "will accept this equity in lieu of $5 billion in cash, or about half the amount that Chrysler promised to invest in the VEBA," Terry writes. "If the ailing automaker gets dismembered in bankruptcy proceedings, or fails to recover in coming years, its retirees could lose all or part of their healthcare benefits." Nationally, the percentage of Americans "under the age of 65 with employer sponsored insurance declined to less than 63 percent in 2007, from more than 67 percent in 1999," and employers are now reporting that they plan to shift more health costs to employees. According to a new survey of businesses, "one-fifth of the companies said they planned to add or switch to a high-deductible or 'consumer-directed' health plan with a health savings account, perhaps doubling the percentage of employers who offer such plans." As the Wall Street Journal's health blog observes, "A big reason is that employers say the recession isn't just crimping business; it's also expected to drive up their health care costs. Those surveyed said they expect their health benefit costs to spike an average 7.4 percent this year (compared to the 6 percent increase employers originally forecast)."

MORE AMERICANS LOSING EMPLOYER INSURANCE: Employers have shed 5.1 million jobs in the last 15 months, and approximately "2.4 million workers have lost the health coverage their jobs provided since the start of the recession." In fact, a new analysis of data from the U.S. Census Bureau and the Bureau of Labor statistics by the Center for American Progress concludes that the worst losses have been in the first three months of 2009, when more than 1 million workers lost health coverage. In March alone, more than 320,000 Americans lost their employer-provided health insurance, "which amounts to approximately 10,680 workers a day." Manufacturing, construction, and professional and business services accounted for three-quarters of total jobs lost, while employees in the durable goods manufacturing sector bore "the greatest burden of the losses in coverage with approximately 733,600 workers becoming uninsured since December 2007," the report concluded. Still, estimates of the rise in the number of uninsured "do not reflect the full extent of health coverage loss due to lost employment." As the report explains, the numbers represent a "conservative estimate of the number affected, since it leaves out spouses and children who may have also lost coverage as a result of a spouse or parent losing their jobs."

'DOCTORS FOR AMERICA' SUPPORT EXPANDING COVERAGE: Overall, the number of Americans without insurance has increased 13 percent since 2007, "the largest two-year leap since the last effort at national health reform in 1994." States like North Carolina, Indiana, and Nevada experienced some of the highest increases of the uninsured. The growing national crisis has led a diverse group of stakeholders and interest groups to advocate for expanding health insurance coverage to all Americans. Yesterday, John Podesta, President and CEO of the Center for American Progress Action Fund, hosted a teleconference with Senate Finance Committee Chairman Max Baucus (D-MT), and President and Co-founder of Doctors for America Dr. Vivek Murthy to announce new efforts by Doctors for America -- a grassroots organization of 11,000 doctors from all 50 states -- to amplify physicians' voices in support of health care reform. "What's a key priority for us is that whatever plan is put forth really does improve access for patients and improve choice for patients," Murthy said on the call. The group will "work to convey the ideas and experiences of physicians to achieve healthcare reform based on four key pillars: affordable coverage, expanded access to care, high quality care, and practice environments that allow physicians to focus on patient care."

REPUBLICANS LEAVE WORKERS WITH NO PLAN: But while health care providers are developing solutions for expanding access to coverage, the Republicans are busy vilifying President Obama's proposals. On Saturday, Republican Party leaders Rep. Eric Cantor (VA), former Florida governor Jeb Bush (R), and former Massachusetts governor Mitt Romney (R) participated in a pizza parlor town hall in Arlington, VA to launch the National Council for a New America. The Council, an effort to rebrand and revive the GOP, was established by Cantor to "duel with the Obama administration in policy areas" where Republicans have a "track record." After almost 40 minutes of speeches, including several reminders that Republicans should not be "nostalgic about the past" -- the speakers opened up to questions from the audience. Ed McKee, the owner of the pizza parlor, asked what Republicans would do to reform health care, citing his own business' struggle to deal with "health insurance rates," which recently "went up 34 percent." Responding to McKee's question concerning the dramatic health care cost hike, Cantor said "that should be a sure sign we ought to be promoting anything that can try to bring health care costs down." But rather than offering any ideas or policy plans for addressing health care costs, Cantor launched into a set of attacks on the health systems in the UK and Canada, saying any reform should not reflect a "government takeover." The National Council's policy paper on health care is similarly vague and lacks a single policy plan.

ENVIRONMENT -- CORPORATIONS AT ODDS WITH CHAMBER OF COMMERCE OVER CLIMATE CHANGE: With global warming legislation underway in the House, the "nation's most powerful lobbying group," the U.S. Chamber of Commerce, has been one of its most outspoken opponents. The Chamber's energy policy "front group," The Institute for 21st Century Energy, promotes the idea that "any new national climate change policy should be conditional on an international agreement that requires full international participation." As the Wonk Room's Brad Johnson explains, "The Institute's climate change policy looks stunningly like that of the Bush administration: "Don't just sit there, do nothing." Now, however, it seems that the Chamber is isolating corporate members by taking such staunchly conservative positions on climate change. Nike is being "more vocal" in urging the Chamber to adopt "a more progressive stance on climate change." Johnson & Johnson also requested that the Chamber withhold public statements regarding climate change that do not "reflect the full range of views, especially those of Chamber members advocating for congressional action." The Waxman-Markey draft bill, "The American Clean Energy and Security Act of 2009," is currently on the House floor and promotes "the development and deployment of new clean energy technologies that would fundamentally change the way we produce, deliver, and use energy." Right-wing backlash to the bill, promulgated by the Chamber, centers on false "dire projections" that the proposed cap-and-trade system would hurt the economy. Bill Kovacs, the Chamber's Vice President for the Environment, Technology, and Regulatory Affairs, has falsely insisted that the bill "would result in energy shortages and high energy prices, which in turn means higher prices for just about everything else." However, this notion is drastically out of touch with the opinions of the businesses the Chamber is supposed to represent. According to Peter Altman, climate campaign director for the Natural Resource Defense Council, 19 companies on the Chamber's board support regulation, while only four oppose.

CIVIL RIGHTS -- WHITE HOUSE ELIMINATED PLEDGE TO REPEAL DEFENSE OF MARRIAGE ACT FROM WEBSITE: After The Progress Report and other outlets noted last week's changes to the Civil Rights page on whitehouse.gov, watering down language on the repeal of "Don't Ask, Don't Tell," Tips-Q noted that the website had also completely eliminated the portion objecting to the Defense of Marriage Act (DOMA). As late as April 28, the website highlighted President Obama's commitment to "repealing" DOMA, as a cached image shows. "Obama also believes that we need to repeal the Defense of Marriage Act," read the website. Today, the website states only that Obama "supports full civil unions and federal rights for LGBT couples and opposes a constitutional ban on same-sex marriage." According to ProPublica's Change Tracker, the changes to the DOMA language were made on April 30. During his campaign, Obama repeatedly pledged to seek to overturn the Defense of Marriage Act, telling The Advocate, "I for a very long time have been interested in repeal of DOMA." During the primary campaign, he touted his longtime opposition to DOMA in a strongly-worded "open letter" to the LGBT community.

ECONOMY -- FRANK SAYS DEMS BLOCKING PROGRESSIVE FINANCE REFORMS SHOULD BE KICKED OUT OF THE PARTY: Last week, Sen. Dick Durbin's (D-IL) "cram-down" amendment -- which would rewrite bankruptcy law to allow judges to renegotiate mortgages with banks -- was rejected 45-51 by the Senate. Twelve Democratic senators voted against the bill, after furious lobbying from the mortgage and banking sectors. The financial sector had funneled millions into the coffers of Democratic senators who voted nay, leading Durbin to decry that banks "own" Congress. This weekend, on the Bill Maher Show, Maher suggested to Rep. Barney Frank (D-MA) that progressive Democrats fighting against moneyed interests form a new party: "Let's be honest, the Democratic party, starting in the 90's, also became the party of business and Wall Street. So what we really need is another party that's the progressive party." Frank objected, saying, "We who don't feel that Wall Street should call the shots are in the majority of the Democratic party." He then suggested that the "minority" of Democrats blocking progressive financial reforms break away to form a third party. "I agree with you that I wish there were more Democrats on one side. But what you're saying, on the Democratic side, who are on the side you want, should leave to become the second party. No, I'm the first party. Let the minority, who doesn't agree with us, let them become the second party," Frank said. Even with the setbacks, Frank said that progressives should be happy that legislation protecting credit card holders against abuses -- which "the banks hated" -- passed the House. "If the Senate doesn't do that, people have a right to be frustrated. But again, the answer is, kick out the minority, don't kick out the majority," he urged.

After speaking with President Obama, Sen. Orrin Hatch (R-UT) predicted that the president will nominate a Supreme Court judge soon. "I'd be surprised if it went beyond this week," Hatch said, adding that Obama told him he won't nominate a "radical or an extremist" to replace Justice David Souter.

Sen. Tom Harkin (D-IA), a chief sponsor of the Employee Free Choice Act, said the Senate may have to sacrifice EFCA "in favor of more modest labor-law changes." "Compromises are going to be made," said Harkin. "It probably won't be card-check, because too many people are opposed to it now."

Sen. Chuck Schumer (D-NY) said yesterday that any public health insurance option "must be subject to the same regulations and requirements as all other plans" in the insurance market. He also suggested that a public plan should be self-sustaining without tax revenue, pay doctors more than Medicare pays, not force doctors and hospitals to participate. and have government managers who are separate from insurance industry regulators.

House Minority Whip Eric Cantor (R-VA) has announced that Alaska Gov. Sarah Palin (R) is joining the GOP's National Council for a New America's "panel of experts." "I am pleased to announce that Governor Palin has joined the National Council for a New America's panel of experts," Cantor said in a statement.

Speaking at the Panetta Institute in Monterey, CA yesterday, former Bush adviser Karl Rove claimed that President Obama "is failing to fulfill his bipartisan promise in Congress and in the polls." But former Obama campaign manager David Plouffe shot back at the criticism, saying, "This is like getting interview lessons from Sarah Palin."

The U.S. government "is expected to direct about 10 of the 19 banks undergoing government stress tests to boost their capital...a move that officials hope will quell fears about the solvency of the financial sector." The banks affected could included Wells Fargo & Co., Bank of America, Citigroup Inc. and other regional banks.

"President Barack Obama plans Tuesday to name a new chairman for the Consumer Product Safety Commission, an agency ridiculed for coziness with the industries whose products it monitors, in addition to expanding the commission and boosting funding for its work." Obama is expected to name former South Carolina education superintendent Inez Moore Tennenbaum as chairman.

Last year, Murtech, a private firm owned by Robert Murtha, nephew of Rep. John Murtha (D-PA), received over $4 million in no-bid defense contracts. Rep. Murtha has steered "hundreds of millions in Pentagon work to companies in his district, many of them fledgling enterprises run by campaign contributors." Robert Murtha "said he is not at liberty to discuss in detail what his company does."

And finally: Senate Finance Committee Chairman Max Baucus (D-MT) is so passionate about health care that he is willing to give his personal e-mail address out to reporters. Yesterday during a conference call hosted by the Center for American Progress Action Fund announcing the creation of Doctors for America, Baucus said, "This may be a bit dangerous, but I really want to hear from you all, so I'm going to give out my personal e-mail address." Reporters were stunned as he revealed his Earthlink address.

Participants at the American Israel Public Affairs Committee Policy Conference this week will be urging their elected representatives to support a two-state solution to the Israel-Palestine conflict.

THINK PROGRESS: Former attorneys general Alberto Gonzales and John Ashcroft disagree with former secretary of state Condoleezza Rice: Just because a president says it does not make it legal.

WONK ROOM: Fox News attacked auto bailouts because they helped unions, now attacks auto bankruptcy because it...helps unions?

YGLESIAS: Killing health reform with kindness.

WASHINGTON INDEPENDENT: Former FBI interrogator Ali Soufan and former State Department adviser Philip Zelikow to testify on torture.

MISSOURI: State House votes "to use more than $335 million in federal stimulus funds for several projects throughout the state."

CALIFORNIA: Forty-five percent of residents don't have broadband connections in their homes.

ECONOMY: For the first time, the federal government "has supplanted sales, property and income taxes as the biggest source of revenue for state and local governments."

"I agree (and I believe a majority of the American people do too) [that gays serving openly in the military] 'would create an unacceptable risk to the high standards of morale, good order and discipline, and unit cohesion that are the essence of military capability.'"
-- Sen. James Inhofe (R-OK), 5/03/09

VERSUS

"[American] voters reject 58 - 35 percent, including 56 - 39 percent in military households, the argument that allowing openly gay men and women to serve would be divisive [for the troops]."
-- Quinnipiac University national poll, 4/30/09

Think Progress

The Erosion of Employer-Sponsored Health Insurance

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