Missed in all the trivial bullshit of the past few days is this really big story:
The broad cutbacks included a 20 percent reduction in payroll for salaried workers, elimination of health care for older white-collar retirees, and suspension of G.M.’s annual stock dividend of $1 a share.
The retirees will receive an additionally $300.00 a month, but as we both know, that will not make up for the loss of their health-care plan. If it did, GM wouldn’t be cutting it in the first place. The $300 is just a cushion. Additionally, how easy is it going to be for 70 year-old retirees to find a new plan other than Medicare? By 65-70, pretty much everyone has a pre-existing condition.
This is a sign of things to come:
General Motors Corp.’s (GM) plan to cut health benefits for certain salaried retirees may make only a small dent in profits at Medco Health Solutions Inc. ( MHS), GM’s pharmacy benefits manager, but it could signal broader, more significant changes to come for the health-benefits industry.
“GM’s decision to cut retiree benefits is likely to have only small impact on (Medco’s) 2009 earnings. Even so, we see the move as a watershed event for the retiree benefits marketplace that is likely to lead other employers to do the same, which will, in turn, cause the issue to grow as an overhang for the stock, ” Morgan Stanley analyst David Veal said.
Probably a good thing the Bush Medicare veto was over-ridden yesterday.
harlana pepper
I can’t think of anything snarky to say. It’s just sad.
Krista
As this happens more and more, I’m hoping that people will get over the “socialist medicine” boogeyman bullshit and will finally start saying, “We’re spending all this money on Iraq, but we don’t have basic universal health coverage for all of our own citizens? WTF?”
Then again, the ones who would be in the position to implement universal healthcare already HAVE quite a nice benefits package.
So yeah…looks like until you folks start rioting in the streets and getting a bunch of celebrity spokespeople demanding universal healthcare, you’re pretty much fucked by the fickle finger of fate.
JR
I don’t know, John, this is simply the free market deciding. The Cons told me this was a good thing. I disagreed and was further told, by Cons, that I was for my opinion a weak intellectual Saddam-loving latte-sipping fruit basket LIEBRAL who should shut up or leave America.
And many, many, many Americans agreed.
Paraphrasing another prior fascist-movement’s aftermath: “First they came for the common people’s health-care, but I had health care so I did nothing…”
PaulW
It is a pity that this isn’t getting more coverage. It’d be nice to make sure people realize our Corporate Overlords don’t give a rat’s ass to provide for their workers like they’re supposed to. Get a few more companies to cut back on health benefits and whammo you’ll get your single payer system from all the pissed-off voters willing to tax them Overlords up the ass bwhahahaaaa.
Hedley Lamarr
“By 65-70, pretty much everyone has a pre-existing condition.”
Take it from one who knows, that should read “By 65-70, pretty much everyone has at least one pre-existing condition.”
jrg
Boomers will be begging for a decent public health plan soon. After years of “personal responsibility” talking points, piss poor leadership, expensive foreign wars, and meaningless cultural jihads, I expect them to increasingly latch onto the taxpayer’s tit.
The boomers, as always, want it both ways. “Small Government” won’t mean dick to them in a few years after they find out their pensions are not worth anything. They will expect the GenXers to dig them out of the hole they created.
I feel sorry for these folks that are getting screwed by corporate crooks, but this probably would not be happening if the boomers took their heads out of their asses back when public debt was not so out of control, but they had big issues like teh Gays and teh welfare queens to worry about.
cleek
i fucking hate MedCo, and UHC, and Aetna. i’d probably hate DElta Dental if i had to deal with them more.
jake
The AMA is starting to push for universal, hard. Even if they aren’t benign kindly docs who just want to care for their patients, they didn’t spend eight years living on sugar and amphetamines so they could leap through burning hoops to get a prescription OK’d. A lot of their expenses come from having to wrangle with insurance companies (and being screwed over by contracts written by Satan’s legal department).
At the current rate of clusterfucking I’d say that by this time next year it will be a clear case of doctors and patients vs. the health insurance companies. A couple of weeks ago the Texas Medical Association brought their Republican Congresscritter to heel by pulling his endorsement when he was going to vote against a Medicare bill Bush didn’t like (it takes money from his attempt to privatize Medicare). I just read that Congress overturned Bush’s veto of the bill. Why? Because the average Congresscritter is smart enough know there are only so many votes AHIP can get them and there’s that pesky rule about working for lobbyists now. If they (the insurance plans) were smart, they would’ve sided with the doctors a couple of years ago so they could have to control over what UHC looks like.
However, the last thing I heard from AHIP was more whining about how UHC was bad for patients and doctors. So they may be too late to get a seat on the clue bus.
zmulls
Let’s make sure we’re not omitting the really important word in the headlines — “retirees.”
They didn’t cut health care benefits for *current* employees (and risk low productivity, walkouts, or just losing people) — they cut it for people who don’t show up for work anymore. “Yeah, I know we promised you while you worked here blah blah blah, but TOO BAD!!!”
On the other hand, this *is* a free market moment. It’s a demonstration of the limitation of the free market, and a demonstration that corporations are not people. And the social contract of the 1950s and 1960s is dead, dead, dead. Your father might have grown up with the big corporation (IBM, GM, etc.) with a pension plan and a promise to take care of you when you retire — and he would have pledged his soul and sacred honor to the corporation.
Now, it’s obvious that you can’t trust what a corporation will do 30 years after you make a deal with them. Even 10 years. A corporation can declare bankruptcy (“sorry, can’t pay for your benefits anymore!”) or just decide to change plans.
Universal health care. Now, please.
4tehlulz
Which reminds me, why hasn’t GM BKed yet? Are they waiting for the 2 people left that hasn’t heard it’s fucked to get the memo?
JD
Ford ditched white-collar retiree health care a couple of years ago. And now they’re canceling life insurance, which my 75-year-old father is just thrilled about.
Janet Strange
And what about the retirees under 65? A lot of working class folks have put in 30-40 years before they hit 65 and choose to retire early. Worse, a lot of people don’t have a choice. They’re forced into early retirement before they had planned to retire when companies do “layoffs” by backing older workers into a retire early or be fired corner.
These folks can’t get Medicare. And it’s pretty hard in your late 50’s-early 60’s to get a job that includes benefits or that will pay enough to buy health insurance on your own. Assuming (unlikely) you don’t have one or more of those pesky preexisting conditions – which begin to happen to most people before age 70.
These folks are really screwed.
mapaghimagsik
The very best argument for privatized health care I can see.
I can haz profits? kthxbai!
...now I try to be amused
An ignorant question:
Why is American business not screaming for universal health care? Linking health care to employment is a big pain in the ass for employers and employees alike. And it’s a competitiveness issue. So where’s the CEO outrage? Do they hold their tongues for ideological reasons?
El Cruzado
They’re actually doing fine outside the US (or at least as fine as current economic conditions allow). Of course the US market being the largest one means it drags down everything else.
If they ever got a clue in the American market and managed to get past their (well-earned, even if mostly in times past) reputation, they wouldn’t do too bad. They will never again be the powerhouse they were back in the good old days, but it’s likely they’ll stay as one of the largest carmakers in the world, jockeying for position with the other big ones.
I can’t believe I’m defending GM btw, since right now I wouldn’t be caught dead buying anything they offer around here (a few of their Euro models however are peachy, but I’m not holding my breath for them to be brought over).
Jon H
“Additionally, how easy is it going to be for 70 year-old retirees to find a new plan other than Medicare?”
Medicare’s working pretty well for my parents.
grandma vicki
For someone who is 70 and has 4 pre-existing conditions my treatment under medicare with the addition of my prescription policy serves me very well. The major problem falls into the category of those who retire before 65 and who are not yet eligible for medicare. That’s the sad part. A universal healthcare plan should hopefully address those issues.
TenguPhule
I foresee a lot of rich CEOs and Ex-Ceos having to watch out for mobs of angry retirees in the future.
kindness
I’m wondering if GM’s (or Ford or Chrysler) retired CEO’s and other top Administration fall under this arrangement or do they still have their gold plated health insurance benefits paid for by the company?
I’m betting those Exec’s don’t apply to this announcement.
How long will it take for some MSM hack to ask this question for all to learn?
jcricket
If you add in “big businesses” and “small businesses” – we might actually get it. Up until the last year or so both have actively fought against any kind of universal/nationalized healthcare. For the life of me I can’t figure out why, except as a knee-jerk anti-government sentiment and a hatred of all taxes.
That is to say, if employers are off the hook for providing access/paying for the care directly, they also want to not pay any corporate taxes for the new nationalized program.
Of course, everything I’ve read says that we can actually spend less, overall, as a nation and get everyone covered, and covered better. Plus employers would eliminate the overhead of COBRA, open enrollment, considering different benefit plans, etc. And small businesses would benefit from lowered direct costs, or increased recruiting/retention ability because they’re not in a worse position than big employers due to not being able to offer healthcare to their workers.
There’s nothing not to like about a good nationalized healthcare system, unless you are an idiot.
CWD
When the going gets rough American big business rolls up its sleeves and gets to work dumping its obligations onto the American tax payer.
Socialize those risks! Bet those salaried folk are happy they never had the opportunity to join a union.
What’s good for GM is good for the country. We see that single payer health care is good for GM, so…
Paul Weimer
GM to Retirees: Why don’t you all just die already?!
jcricket
GM to retirees: Yes, remember all those contractual obligations we made you when times were good? Well, times are bad, so tough noogies.
People act as if unions had done something wrong. Nope, they simply negotiated, and the businesses made what turns out to agreements that would only continue to work if the business was doing better. Whose fault is that?
But really, some significant amount of pension/retiree under-funding is due to healthcare costs. And 50% of personal bankruptcies are due to unexpected healthcare costs. If we simply had nationalized healthcare, or at least a “fully funded medicare for everyone who can’t get/afford private insurance” a massive swath of economy-sucking problems would just GO AWAY!
dbrown
Glad the GM CEO killed the first (and VERY good) electric car – the Volt. Proves that GM knows what it is doing – no wonder the poor Japs can’t compete – wait, what world am I talking about …
Nancy Irving
Note that only white-collar employees are affected. That means workers who don’t have a union.
They couldn’t do the same to the blue-collar folks, because they’re bound by union contracts.
Tell me again why unions are bad for workers, pretty flowers, puppies and the American way?