Healthcare is expected to be a major issue at the bargaining table this year. Negotiations are likely to revolve around higher deductibles and co-payments for employees, or less money for salary increases and other benefits. "In times like these, employers are less inclined to absorb increased health insurance costs," says AFT researcher John Abraham.

Abraham, who counsels state and local federations in negotiating healthcare benefits, notes that during the tight labor market and robust economy of the early and mid-1990s, employers were willing to absorb the costs of healthcare increases.

But the weakened economy has caused employers to alter their focus to cost shifting, he says.

The New York State United Teachers (NYSUT) has had some success maintaining health benefits for its members, says Eric Moore, who works in NYSUT's member benefits department. However, school districts and NYSUT locals are concerned about cost increases in healthcare--especially for prescription drugs. Moore expects these cost concerns to be a major bargaining issue. They are a significant issue now but "thus far, we're holding the line." If costs continue to grow, "it's going to become even more significant down the road," Moore says.

In Florida, "healthcare has been taking bites out of the economy for years," says Patricia Siciliano, director of member benefits and human resources for the United Teachers of Dade (UTD) in Miami. This year, the union expects to see health insurance rates increase by at least 15 percent to 20 percent. Recently, the UTD and other unions established a healthcare task force to examine the structure of their benefits and what could be done to save money.
 

Purchasing power

The neAft Joint Partnership is investigating the feasibility of statewide prescription-drug purchasing pools to help control rising prescription drug benefit costs. The joint effort should result in a roadmap that AFT and NEA locals can use to weigh the advantages and disadvantages of creating a drug purchasing pool. The use of group purchasing would lower costs and allow locals to analyze how prescription drugs are being used.

Similarly, neAft is weighing the value of pooling healthcare purchasing at the state or regional level and continues to support affiliates' efforts to establish such pools. A purchasing coalition would offset the cost of prescription drugs and improve the quality of care.

In February, the AFT established a healthcare task force charged with studying rising healthcare costs for members and the growing number of uninsured Americans.

Healthcare premiums rose from 8.3 percent in 2000 to 11 percent in 2001; today, they are at their highest level in a decade. In 2000, more than half of American workers ages 18 to 64 were covered by a work-related health plan. But, evidence shows that when unemployment increases during an economic downturn, the percentage of people who have employer-based healthcare coverage goes down.

The number of uninsured stood at 39 million in 2000; current estimates put the number closer to 44 million. An "underlying reason for high premiums is the extra subsidies tacked on for Medicare and Medicaid," says Abraham. "Because Medicare and Medicaid operate on fixed budgets, any costs that exceed those budgets get passed on to the insured. This type of cost shifting acts as a secret tax on the middle class."

The well-being of 9 million children who are among the uninsured is at risk as well. The State Children's Health Insurance Program or S-CHIP, a federal-state partnership created in 1997 to provide coverage to previously uninsured children, is expanding. But while some states are continuing to provide funding to cover the program (even as their budgets tighten), other states are reshaping the program to fit within their budget constraints.

The AFT and NEA will continue to support affiliates in their efforts to bargain healthcare benefits by holding joint local, state and regional meetings designed to train leaders and staff on the healthcare bargaining process. The partnership also plans to develop and disseminate materials to leaders and members on healthcare costs, quality and access.