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About keeping that great union insurance…

August 26, 2020

Topics: Quote of the Day

Changes to the guild’s cash-strapped health plan could force thousands of seniors off their coverage in the middle of a pandemic.

By Jeremy Fuster
Portside, LABOR, August 25, 2020

As a result of pandemic-fueled financial troubles, SAG-AFTRA on August 12 announced significant raises to premiums and minimum earnings requirements that it says are necessary to keep the entire plan afloat. Quarterly premiums will jump to $375 — or $747 for those with two or more dependents. Members under 65 will also now have to earn $25,950 or work at least 100 days during a 12-month base earnings period to qualify for coverage.

But the biggest change for seniors is that they will no longer be able to count residuals — which many Hollywood retirees rely on as a fixed income — towards that minimum earnings count.

“It’s infuriating. I’ve been in meetings telling us that this will knock 10% of health plan members off of coverage,” said one member who has been on a guild health plan since 1985. “Well, that 10% is going to be scrambling to get health care in the middle of a pandemic, and the great share of that burden will come on seniors. We are being left behind.”

The production shutdown due to the coronavirus pandemic has only worsened the financial predicament of both the health plan and the union itself. (The guild has laid off 108 people, roughly 20% of its workforce, since March.)

While the pandemic was the trigger, the changes are also connected to years-long trends both within the guild and nationwide. Inside SAG-AFTRA, the health fund has seen its surplus turn into a growing deficit since SAG and AFTRA merged in 2012. In both newsletters announcing the changes and virtual town halls with members, health plan trustees said that employer contributions to the plan have not kept up with the rising costs in health care despite negotiations with health care providers.

“The Trustees of the SAG-AFTRA Health Plan have taken a difficult but necessary action to address financial deficits facing the plan. The impact of healthcare costs that are continuing to skyrocket has been exacerbated by a global pandemic that has brought our industry to a standstill and dramatically diminished contributions to the Health Plan,” read a statement from plan representatives.

The guild’s new contract with the Alliance of Motion Picture and Television Producers — which members approved last month with 74% of the vote — includes a 1% increase in AMPTP contributions to the guild’s health plan, with the option of shifting an additional .5% of the wage increase in years 2 and 3 to the health plan or the SAG Pension Plan/AFTRA Retirement Fund.

But despite that increase in contributions from studios, the health plan trustees now say that it’s not enough to stave off this new premium surge.

Health plan trustees project another $83 million deficit next year, and warn that financial reserves would run out by 2024 without these changes.

The SAG-AFTRA premium hikes are also tied into a larger debate over the American health care system that has become a major factor in the 2020 presidential election. Andrew McGuire, head of single-payer organizing network California OneCare, argued that the lack of cost controls in the Affordable Care Act has allowed insurance companies to raise premiums well above the rate of inflation. Worse, many guild retirees will be turning to a private Medicare supplement marketplace that is similarly flawed.

“What we’re seeing now with these escalating costs and Medicare supplements is the result of decades of Republicans chipping away at the protections Medicare offers and the ability of the government to negotiate costs with insurers and pharmaceuticals,” he said.

During the Democratic presidential primary, one argument against single payer by eventual nominee Joe Biden was that such a system would take away the health care plans that unions have negotiated. It was an argument that he took to labor town halls and to forums hosted by the AFL-CIO. “I have a significant health care plan,” Biden said last September. “But guess what? Under mine, you can keep your health insurance you bargained for if you like it. If you don’t, you can move, and you can come into a public plan.”

Should Biden defeat Donald Trump and Democrats take control of Congress in November, many expect the party to make changes to the ACA and consider implementing a public option instead of the Medicare-for-All plan pushed by Sen. Bernie Sanders and the more progressive wing of the party. But McGuire believes that many union members like those in SAG-AFTRA who have lost their union-provided health care during the pandemic may be more receptive to a single-payer approach.

“The issue of single payer split a lot of unions during the primary, but there had been some unions that didn’t buy into the idea that their plans needed to be protected,” he said. “This pandemic is going to push some of the more recalcitrant unions towards single payer, and that’s going to make it more politically viable among the Democrats.”


Increases in health care costs are coming out of workers’ pockets one way or another: The tradeoff between employer premium contributions and wages

By Laurel Lucia and Ken Jacobs
UC Berkeley Labor Center, January 29, 2020

While the research findings have been mixed on which levers employers rely on most to respond to rising health care costs as well as on what the net impact on wages has been, the bulk of the research literature indicates that, one way or another, most of the burden of ever-increasing health care costs falls on the shoulders of workers. That burden may come in the form of lower wages, higher premium contributions, or higher out-of-pocket costs. All these impacts are likely to have more severe consequences for low- and moderate-income workers, but rising health care costs affect the economic well-being of all workers with job-based coverage.



By Don McCanne, M.D.

So what is happening to that hard-earned labor union health plan that everyone wants to keep, even during their retirement years? This article on the SAG-AFTRA health plan should make those relying on union insurance concerned about the future of their plans. According to the UC Berkeley Labor Center, “most of the burden of ever-increasing health care costs falls on the shoulders of workers.”

Besides, those employer-sponsored health plans that are so dearly cherished by all, what happens to them? In 2019, 67.9 million individuals in the labor market left their jobs (BLS). That can hardly be considered a stable source of health insurance coverage.

The much smaller individual insurance market, including the plans available through the ACA exchanges, is also a relatively unstable source of coverage. Keeping your coverage indefinitely? Very rare.

Reverence for private health plans is hardly a reason to reject a more equitable and comprehensive program that would ensure coverage for everyone, forever: single payer Medicare for All. Who is more likely to be there for you to provide comprehensive health care for life? Your union, your employer, or your government?

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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