One of the cover stories, A Turning Point For Health Care ($), in today’s Wall Street Journal is about how the GM-UAW deal is a turning point for health care. From the article:
The shift isn’t only about dropping coverage or making workers pay more of the bill. Like GM, many employers want to immunize themselves from the risk of rising health costs. In many cases, especially for retirees, this means shifting to plans in which the employer provides a lump sum for health coverage and employees have to figure out how to spend it. That way, the employer knows ahead of time exactly how much it is spending.
In GM’s case, an independent trust will assume the task of providing health coverage to the company’s unionized retirees and spouses. GM will put money in the trust — as much as $35 billion, according to people familiar with the deal — to get it going. But it’s up to the trust to set and manage the benefits.
According to the article Ford is going to stop providing group insurance in January to about 57,000 salaried retirees and their spouses who are over 65 years old. Each person will receive $1,800 per year to help cover insurance premiums. That’s pretty stingy if you ask me. I know it’s nothing for health insurance premiums to be over $500 per month. That measely $1,800 per year isn’t going to do much.
I don’t see how companies can make changes like this, especially to people who were counting on their benefits. Can’t they grandfather people and make cut off points for everyone else?
I wonder if Ford would like it if people stopped paying their monthly car notes? “I’m sorry Ford, but I just don’t have enough to go around so starting in January 2008, I’m only going to pay you $1,800 per year.” LOL! I bet that would go over real well!