There will be no early start this year to contract negotiations between the Guild and The Buffalo News.
The health insurers’ pricing of health plans, as well as the continued skyrocketing cost of health care from doctors and hospitals, proved to be the main impediment to getting a deal done.
This is a very worrisome trend.
Guild leaders sought an early start to bargaining – the current contract doesn’t expire until July 31, 2011 – because it looked like a win-win situation for employees and the company.
By starting negotiations early, we could have made health plan changes that reduced costs for The News next year, when The News is obligated to pay the full premium for health care insurance. A similar strategy three years ago also benefited Guild members by keeping health insurance affordable over an extended contract.
By bargaining early, we also could have put off, once again, having to confront a potentially difficult clause in our contract. Generally speaking, the clause says that beyond Dec. 31, 2011, the company’s contribution toward health insurance is frozen at its 2011 level plus 5 percent increases each year after that.
The problem is that health insurance premiums have increased at a much larger rate than 5 percent a year. If the clause ever takes effect, employee contributions toward the premium could grow quickly into hundreds and then thousands of dollars annually, with no cap.
Blue Cross and Blue Shield of Western New York, the sole insurer for the Guild, is proposing to raise premiums for 2011 by 19.7 percent. The company raised premiums 17 percent in 2010.
There appear to be no changes we can make to offset such a large increase.
At mid-year, the Guild sought prices for an alternative health plan from Blue Cross Blue Shield that called for employees to pay 10 percent of medical costs up to a certain amount. At that time, Blue Cross Blue Shield said the cost of the alternative plan would be nearly 10 percent less than our current plan. That made us optimistic we could produce savings from a redesign of our health plan when the Guild and News began to explore early negotiations in September.
However, in October, Blue Cross and Blue Shield submitted prices for its 2011 health plans that provided virtually no savings through this alternative plan, as well as another that would have had employees paying 20 percent of medical costs.
We don’t understand it, and that’s frustrating considering The News seemed willing to negotiate a deal if the numbers were right.
The health insurer’s explanation is that our medical costs, on top of health care inflation, are now greater than the premiums Blue Cross and Blue Shield collects from the Guild’s group at The News. Even if this is true, it’s difficult to understand how alternative plans with higher deductibles and co-pays can be priced virtually the same as our current plan.
To make matters worse, Independent Health, a competing insurer, was unable to offer better prices.
What does all this mean?
It reminds us that, for better or worse, the cost of our health insurance is now based on what we spend for heath care services. We are average spenders, according to the health insurance companies, but a handful of extraordinarily expensive cases has made us more costly to insure. Everyone has a financial stake in taking care of themselves and addressing small medical issues before they become major problems.
It reflects the national crisis over medical costs, and shows how those rising costs are resulting in a stagnant or lowered standard of living for many individuals. We all have an economic stake in efforts to control those costs.
Finally, it increases the risk of a battle with The News over health insurance, a message the Guild bargaining team delivered to management. Guild leaders already are examining options for next year. But there are no easy answers to what to do about health insurance, and it will likely take an effort by everyone in the Guild to overcome the challenge we face.