September 30, 2007

A REFRESHINGLY STRAIGHTFORWARD STATEMENT OF THE FACTS:

The GM-UAW contract: Pace car for the U.S.?: If approved, this deal sets big tasks for GM and the UAW that can help the US stay competitive and healthy. (CS Monitor, 10/01/07)

For the UAW, the task ahead is to run a new type of healthcare enterprise, called a "voluntary employee beneficiary association"(VEBA). GM's initial contribution of $30 billion to VEBA will keep it going for a while. But some VEBAs in other industries have failed. The UAW must show that a consumer-driven healthcare system can work by restraining costs, such as providing incentives for preventive healthcare.

Any success with this type of private healthcare could alter the debate over government versus private systems. The current dispute over increased federal funding for children's health in Washington would take the US further toward government-run care. But major Democratic presidential candidates have shifted to emphasizing private systems.


Rare enough for the mainstream to get the implications of either SHIP or the UAW VEBA right, nevermind both.

Posted by Orrin Judd at September 30, 2007 6:49 PM
Comments

Schip isn't about kids, it's about inducing the privately insured to move to government care, which, in turn is intentionally designed to be underfunded, leading to calls "single payer" to be the only answer.

Posted by: Bruno at October 1, 2007 7:24 AM

There's no incentive to succeed. When they run out of money, they'll get more from GM, if it still exists, or the US Treasury.

Posted by: erp at October 1, 2007 8:05 AM

erp,

Ever hear of TIAA-CREF? It's one of the biggest reasons why the various teacher's unions are as powerful as they are, and why professor tenure is solid granite. It's based on principles similar to what this VEBA is based upon.

Those folks manage their client's money quite well. I suspect that the GM retirees' VEBA will do the same.

Posted by: Brad S at October 1, 2007 3:40 PM
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