Labor Union Blog

Profits for the nation’s 10 largest health insurance companies increased 250 percent between 2000 and 2009—10 times faster than inflation—but that hasn’t stopped the private insurance industry from trying to reach even deeper into consumers’ pocketbooks with huge premium increases.

According to a new report from the U.S. Department of Health and Human Services (HHS), the nation’s five largest insurance companies took in combined profits of $12.2 billion last year, up 56 percent over 2008.

But companies such as Anthem Blue Cross of California, owned by WellPoint, which enjoyed a $4.7 billion profit in 2009, want more. Anthem announced this month it would raise premiums on 800,000 Californians by as much as 39 percent. Insurers in several other states are seeking similar hikes. Says HHS Secretary Kathleen Sebelius:

Over the last year, America’s largest insurance companies have requested premium increases of 56 percent in Michigan, 24 percent in Connecticut, 23 percent in Maine, 20 percent in Oregon, and 16 percent in Rhode Island, to name just a few states. Premium increases have left thousands of families that are already struggling during the economic downturn with an unpleasant choice between fewer benefits, higher premiums, or having no insurance at all. Hard-working families deserve better.

The HHS report says the increases are five to 10 times larger than the growth rate in national health expenditures and are “disturbing examples of the problems that make reforming our health insurance system more important than ever.”

In California, after a huge public outcry and criticism from the Obama administration and Congress, Anthem delayed its rate increases and WellPoint CEO Angela Braly will soon appear before the U.S. House Oversight and Investigations Subcommittee to answer questions about the premium hikes.

Click here for the full HHS report.

In a related health care development, 8.5 million seniors and people with disabilities enrolled in the private for-profit Medicare Advantage programs are seeing their premiums jump by about 14 percent this year, but some may see rate increases as high as 31 percent, according to a report released today.

Leslie Spindle, vice president of Avalere Health, a data analysis firm that issued the report, told the Associated Press:

These premium increases fit within a broader trend of increased financial pressure on the insured.  We see very large premium increases and a continued upward creep in how much out-of-pocket expenses beneficiaries are expected to pay, such as co-payments.

Medicare Advantage was designed as a pilot program to privatize Medicare during the Bush administration. It allows seniors to receive their benefits through private insurers who, in turn, are reimbursed by the federal government.

But currently, the government pays private insurance companies, on average, 13 percent more for providing coverage to Medicare Advantage clients than it would pay for the same care under traditional Medicare. Says Medicare spokesman Peter Ashkenaz:

The plans need to explain why these increases are necessary.

Meanwhile, the health care reform debate reignites next week with a televised White House bipartisan health care reform summit. Prior to the Thursday event, the Obama administration is expected to unveil a new health care reform plan that combines elements of the House- and Senate-passed bills. News reports say Republicans also will present a plan.

The details of the proposals are not known. But as AFL-CIO President Richard Trumka said:

The Massachusetts post-election polling made one thing clear: The country will not accept a tax on working families’ health care benefits.

We will keep you posted.

The global union movement will mark Feb. 20 as the World Day of Social Justice by calling for a new economic model that emphasizes jobs, not profits.

The current system of globalization has created the worst economic downturn since the Great Depression. Social justice has been denied to millions of men and women hit by unemployment or marginalized into the ranks of the working poor, says Guy Ryder, general secretary of the International Trade Union Confederation (ITUC).  

If anything, the global crisis has served to show up the serious fault lines in the current model of huge capital accumulation through risky, unregulated financial transactions, and its failure to spread the wealth in a fair and sustainable way, through the creation of decent jobs and livelihoods for all.

The ITUC supports a new global economic model built around the principles in the International Labor Organization’s (ILO’s) Global Jobs Pact, which include comprehensive measures to stimulate employment growth and provide basic protections for workers and their families.

You can read the ITUC statement here.

The best way to reduce the growing federal deficit is to create 10 million jobs now—the number of jobs needed to close our jobs deficit—not to cut vital programs such as Social Security and Medicare, AFL-CIO President Richard Trumka said.

President Obama yesterday signed an executive order creating an 18-member National Commission on Fiscal Responsibility and Reform to propose ways to reduce the growing national debt. Click here to read the executive order.

Trumka cited data from the nonpartisan Congressional Budget Office that most of the deficit over the next 10 years will come from the Bush administration’s tax cuts for the rich, the wars in Afghanistan and Iraq, spiraling health care costs and the recession.

The main driver of the recent increases in deficit projections is worsening economic conditions—in short, the present deficit crisis is largely a symptom of the jobs crisis.

Solving the jobs crisis and the deficit will require large amounts of public investment in the short term, which should be paid for in future years by taxing Wall Street, Trumka said. Read the full statement here.

Also, it is critical that the newly appointed commission not focus on cutting entitlements, Trumka said. The problem with perennial proposals for entitlement commissions and deficit commissions is that they are too often premised on the mistaken assumption that short-term stimulus and entitlement spending are the root causes of burgeoning budget deficits. But that is not the case, he said.

Social Security is fundamentally sound and does not contribute meaningfully to our long-term deficit. With the decline of defined-benefit pensions, the sudden loss of retirement savings for millions and the dramatic increase in economic uncertainty, strengthening Social Security’s core guarantee of retiring with dignity is now more important than ever.

Problems with Medicare financing are a symptom of the larger problem of rising health care costs and can be solved by comprehensive health care reform, not benefit cuts, he added.

Commissions have been, and can be, serious and useful mechanisms to grapple with difficult problems. But the true test of this commission’s success will be whether it helps fix our budget deficits by attacking the jobs deficit, or whether it makes our budget problems worse by sacrificing jobs and urgently needed long-term public investment.

Miami workers told a press conference in December about wage theft in the county.

With more than 100 supporters in the audience, the Miami-Dade County (Fla.) Board of County Commissioners yesterday approved the first countywide wage theft ordinance in the country. The law, which passed on a 10-0 vote, will help ensure that workers who are unpaid or underpaid for their work have a way to make their voices heard and recover their hard-earned wages.

Specifically, the new law prohibits wage theft and gives the county legal authority to intervene and help recover back pay for workers who were cheated out of their fair pay.

After the vote, Fred Frost, president of the South Florida AFL-CIO, said:

The ordinance will make a huge impact in people’s lives, putting food on the table and roofs over their heads. This shows coalitions of labor, community and the religious groups will work. This is all about dignity and will be good for workers, taxpayers and employers who do the right thing.         

For about a year, members of the South Florida Wage Theft Task Force—a coalition of union, immigrant, faith, women’s and legal services organizations—worked with County Commissioner Natacha Seijas to craft and introduce the ordinance.

The coalition also used its combined political strength to lobby for passage of the ordinance, even gaining the support of The Miami Herald. In a Feb. 17 editorial, the paper said:

Recovering back wages owed workers will put more money in the local economy, send a message to crooked employers and create a more level playing field for honest employers.

“This is momentous,” said Jeanette Smith, executive director of  South Florida Interfaith Worker Justice.

The passing of this legislation…hopefully, will encourage groups all over the country to establish similar mechanisms for workers in their communities.

The Miami-Dade vote reflects a growing awareness at the federal and local levels that wage theft is a national epidemic, which robs millions of workers of billions of dollars they’ve worked for but never seen.

 San Francisco already has an ordinance similar to Miami-Dade’s, but it only covers the city. Los Angeles and New Orleans also are considering wage theft legislation.

U.S. Labor Secretary Hilda Solis has said her department is “committed to enforcing all employment laws,” particularly those related to the payment of minimum wage and overtime. She has increased staffing levels at the Wage and Hour Division, putting more investigators into the field.