The two-day strike against General Motors by the United Auto Workers was another reminder -- if one was needed -- that the nation's health care crisis isn't just about the uninsured. It affects retirees, workers with coverage and corporate profits as well. And a solution is urgently needed.
True, the UAW walked off the job over several issues, including wages and outsourcing of jobs. But a major issue was how to provide retired auto workers with the health benefits they thought they would receive when their days on the assembly line were over. Now, thanks to a creative solution worked out between management and labor, the retirees' health coverage will be paid for out of a trust managed by the union and overseen by the Securities and Exchange Commission. GM will contribute $35 billion to the fund to get it going. In exchange, the company will be relieved of an estimated $50 billion in retiree health plan obligations it faced before the strike began.
Thus, the old saying that what is good for GM is good for the country has been modified. Today, it comes down to what ails GM ails the country as well. The giant automaker isn't the only company facing mounting health coverage expenses. All companies are. But GM's burden is also competing on an uneven playing field where auto workers and retirees in other nations are covered by government-sponsored health care plans. But in the United States, the old model of employer-provided health coverage persists, making it harder for American companies to compete in the global marketplace.
In a sense, American businesses only have themselves to blame for their dilemma. When health care costs were low, executives readily agreed to raise health care and pension benefits in lieu of raises. Now, with health care costs escalating, those concessions are proving burdensome.
Moreover, the business community has long resisted a national health care system. In 1993, then-first lady Hillary Clinton encountered that resistance when she attempted to overhaul the way health care is paid for in the United States. Even now, as a presidential candidate, she talks of bearing the scars from that battle and has put forth a new, hybrid plan that incorporates private coverage and national pool coverage for the uninsured.
In 1993, when Mrs. Clinton was being pilloried over health care, GM was the No. 1 automaker in the world. In April, it fell to No. 2, behind Toyota. Talk about the handwriting on the wall.