Health Care: Our Challenge

Recording Vice President's Report

Volume CVII, No. 5May, 2007

Bill Dennison

While it is too early to gauge the financial impact on the Local 802 health plan of the changes that became effective January 1, 2007, the impact on 802 members has been dramatic. The cuts in coverage have made most feel far less secure.

The increased out-of-pocket costs and premium payments have had the effect of a wage cut.

While we hope the changes have stabilized the plan, this is not a long-term solution for either the plan or for your health coverage.

With that in mind, President Landolfi and the Broadway Theatre Committee began this year’s Broadway negotiations focused on health care.

From the early 1990’s, Broadway’s health benefit contributions have not kept pace with rising costs.

In 1993, the HBP contribution and hospitalization payment for regular orchestra members totaled $75.91 per week. In 2006 that same contribution totaled $87.91. Over those 13 years, that represents a 16 percent increase — barely 1 percent a year.

At the same time, real health care costs have risen much faster. In the last few years, the rise has been in the double-digit percentages.

Last year, as a percent of earnings, Broadway contributions to our health plan were among the lowest of all our agreements.

Including sick pay, the health benefit contributions from Broadway employers have averaged around 7 percent of earnings.

For many other employers — both inside and outside the entertainment industry — 15 to 20 percent of earnings have become typical health benefit payments.

This low contribution rate is one of the reasons benefits had to be cut.

It’s also the reason negotiations this year had to focus on health benefits.

As Allegro goes to press, we are nearing completion of Broadway contract talks.

We believe the final agreement will go a long way towards rectifying the health situation.

However, the only way to improve the plan for others is to negotiate similar increases in other collective bargaining agreements.

I believe the possibility exists to do that and thereby extend benefit improvements to many others.

One thing is certain: there is no such thing as inexpensive health insurance coverage and the problem will likely only get worse.

Every 802 member — indeed every citizen — should be asking: how long before this country begins to solve the national crisis that is our health care system?

Since I last wrote about the problems with 802’s Health Benefits Plan, the number of uninsured in this nation rose by another 500,000.

Now nearly 46 million citizens are reported as uninsured.

That number continues to grow, even as insurance and drug company profits soar.

More money is spent on advertising “lifestyle drugs” than on research to cure most kinds of cancer.

According to Fortune Magazine, in 2005, the drug companies Procter and Gamble, Merck, Amgen, Abbot and the insurer UnitedHealth Group were among the 50 most profitable companies in the U.S.

Drug company executive officers have become the equivalent of the 19th century robber barons.

In 2006, Johnson and Johnson’s CEO received salary and bonuses of $28 million, according to Dow Jones.

Merck CEO Richard Clark received $10 million in compensation. And the golden parachute Pfizer CEO Henry McKinnell got when he left the company in 2006 included pension, stock and other benefits was worth $180 million, according to AFL-CIO Corpwatch.

CEO William McGuire of UnitedHealth Group had an annual salary in 2005 of $124 million and stock options worth more than $1.7 billion, according to

Where does this leave the rest of us?

In large measure because of rising costs and the burden of the uninsured, fewer than 60 percent of employers now provide health insurance — and that number is rapidly falling.

Even where there is coverage, workers are now paying an average of 25 percent of the cost.

Half of all personal bankruptcies and 30 percent of credit card debt are due to medical bills.

Nearly every employer-based collectively bargained health plan is in crisis.

Local 802’s Emergency Relief Fund continues to be overwhelmed by member health care issues.

As we’ve said in the past, the only real solution is a single payer national health care plan.

If you haven’t called or written your Congress members about this issue, do it now!