Should Pay More
For Health Care
The day was taken up by a company presentation on
health insurance. Larry Cook, insurance program manager, and health
care associates Ginny Proestakes and Pat Mattice gave the company’s
view of health plan goals and costs. The clear message throughout
the lengthy presentation was that, in the opinion of management, GE
pays too much for health insurance and workers not enough.
Themes repeated throughout the presentation
Health care costs impact business
Cost increases are a major business concern.
GE businesses pay the health costs (nearly
$7,000 per employee annually) dollar for dollar for their
GE offers better health insurance benefits than
The employees of competitors pay more for their
insurance than do GE employees.
GE is committed to plans which maintain
"reasonable" levels of cost sharing.
Throughout the presentation the UE committee voiced
a number of questions and criticisms. The union reminded the GE
representatives that UE has long advocated the best, most equitable
and far-reaching solution to the nation’s health-care crisis — a
The company asserted that "business
realities" included competition, declining prices for products
and services, and a trend towards inflation of medical costs. The
union challenged the company both on its claim of declining prices
and competition. Are profit margins also going down? asked Ted
Bradley, Local 1010. If productivity gains are so remarkable that
profits increase despite declining prices, workers’ reward should
not be more cost shifting, declared Stephen Tormey.
Nita Gonzalez, Local 1010, and President Hovis took
the company to task for forcing workers out of the Comprehensive
Medical Benefits (CMB) plan and into Health Care Preferred (HCP)
through high fees. Joyce Sumner, Local 332, and Betsy Potter, Local
618, wanted to know, since the company is self-insured, why can’t
there be one plan without fees or co-payments?
The GE benefits staff stressed the importance of
consumer education and preventative health care. Bob Brown, Local
332, said the company is helping to drive up costs by no longer
paying for physical examinations at his location. President Hovis
reminded the GE representatives that the union had to shame the
company into paying for mammograms and how the company has
repeatedly refused to cover well-baby programs.
The UE committee was unimpressed by the considerable
emphasis the company gave to rising drug prices and employees
responsibility as consumers to make "smart choices." GE
workers are not responsible for the price-gouging that has resulted
from pharmaceutical companies adopting GE’s marketing techniques,
the union leaders said. "I cannot get a prescription unless a
doctor gives it to me," objected Bill Callahan, Local 751.
"You’re busting our chops and it’s not our problem."
"If a doctor tells me I need a prescription drug, am I supposed
to tell him I should take a Motrin because it’s cheaper?"
asked Ted Bradley, Local 1010. As Nita Gonzalez, Local 1010, sees
it, the problem is not that employees are clamoring for unnecessary
drugs, it’s insurance companies refusing to pay for medication
The GE presentation laid particular stress on the
"rapidly escalating health costs" with regard to retirees’
prescription drugs and the company’s wish for relief.
Tormey said there’s nothing wrong with the goal of
employees being "active" and "educated"
consumers, but there are fewer and fewer choices as more of the
health care system becomes dominated by a handful of for-profit
The union disputed the company’s figures on
competitors’ benefits and employee costs. According to research by
the union, employees of many major firms pay roughly as much or less
than GE workers, not twice as much as suggested by the company’s
data. In the case of the Allen-Bradley division of Rockwell
International, under their UE contract the vast majority of workers
pay nothing, while others pay less than GE workers.
None of the "competitors" cited by GE have
close to the company’s wealth and economic power, the union
The company stressed that health costs per employee
are rising, but conceded that aggregate GE health benefit costs have
fallen by $200 million since 1992. Insurance costs represent a
steadily declining share of net profits; from 14.4% in 1981 to just
4.8% in 1999.
Union representatives firmly rejected the idea that
workers should pay more for health insurance. "The time comes
when employees say, ‘enough is enough,’" said President
Hovis. Cost shifting compromises the modest wage increases
negotiated in recent contracts, he said. Bill Callahan told the
company that the union is doing its part by encouraging workers to
be better-informed consumers but cannot accept higher out-of-pocket
expenses. "My membership’s not going to accept this," he
said. "If you continue to go on this way, you will definitely
be stepping on my membership’s toes."
The UE committee expressed particular concern over
the company’s goal of strengthening the link between employee cost
sharing and "overall claims experience." Tormey told the
company that this sounds like an unacceptable "reverse
COLA" that will accelerate cost shifting. GE’s John Curtin
confirmed that this is being considered by the company.
Pat Rafferty, Local 506, pointed out that there are
still many problems with the company’s health-care networks.
Rafferty read a letter from a Local 506 member which detailed
several months of unconscionable delay in receiving the medication
he needs as a diabetic. "I get these horror stories
frequently," Rafferty said. "The whole process doesn’t
work." Nita Gonzalez and Ted Bradley of Local 1010 reported
similar frustration with the networks. Rafferty and Local 506
President Dave Adams also reported dissatisfaction with major cost
increases to retirees enrolled in GE’s MedicarePlus plan, which is
a Medicare HMO. The union promised medical insurance proposals of
its own next week.
Negotiations recessed until 9 o’clock on the
morning of Tuesday, June 6.
Representing the union during the first week of
negotiations were General President John Hovis, Director of
Organization Robert Kingsley, Conference Board Secretary Stephen
Tormey, Research Director Lisa Frank, Bob Brown and Joyce Sumner,
Local 332, David Adams and Patrick Rafferty, Local 506, Betsy
Potter, Local 618, William Callahan, Local 751, and Ted Bradley and
Nita Gonzalez, Local 1010. International Representative Chris
Townsend represented UE at the IUE table.