let it be said that NRLN is behind the learning curve when it comes to
detecting corporate fast shuffles involving retirees. Just a short
while ago, NRLN reported that, in a surprise move, General Motors had
solicited its retirees to urge Congress to immediately enact
legislation that would provide greater access to cheap generic drugs
and add a prescription drug benefit to Medicare. (See NRLN Speaks Out
On Legislation To Authorize Greater Access To Generic Drugs And A
Medicare Prescription Drug Benefit at this website).
suspected that lurking behind GMs sudden enthusiasm for
retiree-friendly drug legislation was a two-fold hidden agenda;
first, to herd all of its retirees into a generic drug concentration
camp which would enable GM to walk away from its costlier regular
prescription drug commitments; second, to dump all of its
Medicare-eligible retiree drug costs on Medicare (and the taxpayers)
even if that would mean replacement of superior GM drug coverage by
inferior Medicare coverage. Bear in mind that the primary purpose of
adding a prescription drug benefit to Medicare is to provide such
coverage to those who lack it rather than to eliminate coverage for
those who already have it.
appears that NRLNs suspicions of GMs motives were on target. Hardly
was the ink dry on GMs letters urging retirees to pressure Congress
for new drug legislation, when GMs Vice President for Global Human
Resources, one Kathleen S. Barclay, wrote all of the same GM retirees
to inform them that they would have to pay a new
monthly increase in the contributions they must make to
preserve their retiree health benefits coverage under the GM plan.
These increases will range from $9 to $51 monthly.
Furthermore, the same retirees were informed that changes were being
made to the retirees prescription drug program to encourage the use
of generic drugs. These changes include a new prescription drug
co-payment of $35 if non-generic medicine is purchased retail, a $50
co-payment for home delivery of a 3-month supply of non-generic drugs,
and, in both instances, retiree responsibility for paying the
difference in cost between the generic and non-generic version of the
drug in addition to these new co-payments.
Together with similar increases in
co-payments and drugs for retirees enrolled in HMOs, and new monthly
charges for retiree vision care benefits, it is estimated that GMs
retirees have been zapped with close to a 40% increase in
out-of-pocket costs they must absorb in order to receive GM health
insurance benefits in 2003. Moreover, there is no guarantee that
additional charges will not be imposed for 2004. Down the road, it is
possible that GM may decide to make its retirees responsible for
financing virtually all of their health insurance benefits while GM
stays on as a figurehead sponsor of these benefits.
In defense of transferring more
and more of its health insurance costs to its retirees, GM claims that
business and economic conditions are such that virtually all
employers are sharing more of these [health insurance] costs with
their employees and retirees and that GM operates in an extremely
competitive industry. But why should retirees many of whom are
saddled with serious illnesses and are living on fixed incomes without
receiving any cost-of-living pension increases from GM be forced to
bail out GM because in the past the company made health benefit
commitments to retirees without anticipating the recent rise in health
costs. It was perfectly feasible for GM to specify the limits of its
retiree health insurance promises before their employees retired and
if they failed to do so they only have themselves to blame.
Under existing federal law GM could
not reduce or eliminate the pensions they already have provided to
retirees even if after they awarded the pensions GM became
unprofitable or was confronted with an extremely competitive
industry. Why should it be any different for retiree health benefits,
which no one forced GM to provide in the first place?
In the final analysis, it is only
because federal law does not safeguard retiree health benefits the
same way it does pensions that GM, a profitable company, is able to
get away with this latest assault on retiree health. NRLN urges GM
retirees and all retirees to contact their Congressional
representatives and their challengers ASAP and let them know that
their vote in the November elections depends on whether the candidate
supports the early enactment of HR1322 or S2904, the Emergency Retiree
Health Benefits Protection Act. That bill would preclude companies
like GM from decreasing or canceling retiree health insurance benefits
after an employee retires and would protect such health benefits the
same as pensions.
If retirees fail to unite
and act now, the corporate onslaught on their health benefits will
continue without letup. Write NRLN at P.O. Box 18757, Washington, D.C., 20036-8757, Washington, D.C.
20036-9998, call 202-659-0620. For
further information or assistance on how you can help NRLN in its
campaign to protect retiree health benefits.