Am I wrong, or is GM's new agreement with the UAW a potentially lethal blow to the cause of universal health care? The Detroit automakers, staggering under the weight of employee health insurance costs, were expected to be big players in the lobbying for a universal coverage bill in a Democratic administration. If they've paid off 80 years of health costs upfront, as GM's new contract has it doing (Ford and Chrysler are expected to enter similar arrangements), they no longer have a stake in the government picking up those costs.
Maybe there's some provision in the agreement about what happens if government-subsidized health care expands. If anyone actually knows anything about this, please educate me in the comments.
Micheline Maynard's detailed story on the contracts doesn't mention the health care policy angle. It does, however, contain this bizarrely wrongheaded paragraph:
Likewise, U.A.W. members, assured of health care benefits that were the envy of the labor movement, had little incentive to take better care of their health, since their generous coverage would pay for most any ailment.This is what's known as the moral hazard theory. It holds that, when people are insulated from a particular risk, they become less concerned about that risk: if I can buy flood insurance, I'm more likely to build a house on a flood plain. Moral hazard concerns were in the news recently when the Federal Reserve was considering whether to bail out investors hit by the subprime mortgage collapse. Every time the central bank protects investors from losses on risky bets, it's encouraging more risky bets in the future.
Maynard is applying the moral hazard argument to well-insured union autoworkers: their coverage is so good that they have "little incentive to take better care of their health." But this is ludicrous on its face. Health insurance can absorb the financial costs of ill health, but those are far from the only costs. If you're in constant pain, it's no great consolation that someone else pays for your treatments. If you're bedridden you want to get up and go outside, even if your insurance company pays for in-home care. If you learn you're going to die young you still mind, even if you know your family will receive a generous pension. Health care is unlike other economic goods, and treating it like them is one reason this country's health care system is so fucked up. It's surprising to see the Times, in a news story, get this confused.
