A recent article in the New York Times illustrates an important problem of the auto industry bailout. By not addressing the cause of high costs in health care coverage the bailout discussion focuses only on finding the money to cover the expenses. The article was focused on General Motors need to restructure its debt obligations. One looming debt is a $10 billion payment next year into the UAW Health Care Trust. “G.M. has the most at stake with the U.A.W. Its future obligations for retiree health care are estimated at $47 billion, and by next year it is required by its contract to contribute more than $10 billion to the trust set up in 2007.” 

The article goes on to state, almost off handedly, that GM has already cut health care benefits to over 100,000 nonunion retirees. That is a quarter of the retired GM workforce.  The Unions for their part are trying to protect the “jewels’” of the UAW contract, one of which is health care for life. 

Any government bailout of the auto industry should focus in part on reducing the cost of health care. It is unconscionable that the federal government would take tax payer’s money to provide assistance to the auto industry and not require a restructuring of the health care system for retired workers. 

Several people have suggested solutions to health care reform related to the auto industry bailout.  One suggestion from David Yen , a bankruptcy attorney, supports giving the unions tax credits tied to the union health care bill rather than direct cash payments. This solution, while right in intent, would not address the problem of rising health care costs, as there would be no incentive for the unions to secure the best value in health care services. As we have seen with Medicare, benefits without incentives to reduce costs inevitably result in higher costs overall. 

Clearly, it is a high probability that if GM goes out of business or is restructured under bankruptcy the health care provision will be eliminated. It would seem in the UAW’s best interest to work the problem from the cost reduction end and provide assurances to GM and the government that their retired members will reduce the health care burden by taking measures to reduce costs. Those measures could include, bargaining for health care services as a group, providing their membership with cost comparisons of service providers, or instituting health improvement measures such as smoking cessation and healthy lifestyle programs for their members.

Without addressing the high cost of health care the auto industry bailout will only be perpetuating the current health care pricing system that ignores transparency, price comparisons, and cost reductions in favor of “business as usual.” This country can no longer afford “business as usual” health care.

The following article shares some good news for the uninsured. Some hospitals are offering the uninsured discounted rates. Historically, the uninsured have had to pay the highest rates as they lack the negotiating power of a large insurance company. (This is odd given the uninsured likely have less money than the insured, but that’s the health care market for you.) My guess is many providers have offered discounts for years for those that negotiate and clearly providers have had to write-off many services for those that simply cannot pay.

The article also notes not surprisingly that not all providers offer the same discounts and that one may have to ask for the discounted price to get it. Like other consumer markets, those that do their research can find a bigger deal for their health care. Unfortunately, price shopping in this industry is difficult and time consuming. It is challenging to call multiple providers to request prices and furthermore you do not always know if the same services are included at each provider.

HealDeal may be able to help. HealDeal offers pricing information from a growing list of providers and standardizes the services to help you shop for health care. Using HealDeal, you can go to one place to compare provider prices and locations, hours, languages spoken, etc. If you are paying out of your own pocket, do a little extra research on HealDeal to make sure you are not missing out on a discount.

Although it is not surprising that the number of uninsured is increasing during this deep recession, the low adoption of COBRA coverage as described in a recent article is startling. COBRA exists to help the unemployed maintain quality health insurance when they have lost their job. However, the cost of health insurance has increased so dramatically in the past 10 years that COBRA is not affordable to many that lose their job. The article states that only 9% of those eligible for COBRA are signing up compared to 18 – 26% in previous COBRA surveys. The fact of the matter is that unemployment benefits are insufficient to pay for housing, food, and health insurance so health insurance is dropped.

HealDeal can help those that do not have health insurance find affordable care. For the increasing number of people that do not have insurance and don’t qualify for Medicaid, it is critical that they spend their health care dollars wisely.

HealDeal consolidates pricing information from multiple providers and many medical services. This enables the uninsured to shop around and view prices before paying for the service. Check it out and/or pass it on to someone that could use the help in this difficult economic climate.