The head of the United Auto Workers wants to pool the employees of the Detroit Three automobile companies to extract lower prices from healthcare companies.
But details of the influential union's plan are unclear. It's also not certain how or if Blue Cross and Blue Shield of Michigan, the third-party payer for the large automakers, would be affected.
The UAW is preparing for its next round of negotiations with Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles (FCA) in September. Each car company is self-insured, meaning they pay the medical claims of their employees on their own and outsource the administrative functions. Blue Cross and Blue Shield of Michigan is the predominant claims administrator for all three companies, although some regional HMOs perform services in other states.
UAW President Dennis Williams said using the size of all three companies could have significant bargaining power.
“The more people that pool together in this healthcare system, the more leverage you have with the institutions, such as hospitals, clinics and insurance companies,” Williams said during Thursday's news conference. “That's the focus right now.”
About 900,000 retired and active UAW employees are spread across FCA, Ford and GM. “If you pool that, that's a pretty good number,” Williams said. “I'd go to the bargaining table with that number. In fact, I am.”
The auto companies at least appear willing to listen to the UAW. Healthcare benefits consume billions of automakers' dollars every year, and many self-insured employers have been looking to cut costs wherever possible.
“As the cost of healthcare continues to increase at an unsustainable rate, FCA US is open to discussing with the UAW options that will reduce cost while both the improving the quality of care and the health of our employees,” FCA spokesperson Jodi Tinson said.
“We're always open to talking through creative solutions to deliver benefits our employees value while improving the long-term competitiveness of the company,” GM spokesman Pete Ternes said.
Ford did not respond to a request for comment. Blue Cross and Blue Shield also did not immediately respond to questions about how such an alliance would alter its business as the claims administrator.
Automakers and the UAW also share common disdain for a certain healthcare policy: the Affordable Care Act's Cadillac tax. That excise tax goes into effect in 2018 and levies a fee on employers that offer healthcare policies with generous benefits and little cost-sharing for employees. A Health Affairs study from this year found that the Cadillac tax will greatly diminish collectively bargained union plans.
“I think it's very unfair for the United States government to penalize people for having good healthcare,” Williams said at the news conference.
