The recent contract negotiations and short-lived strike between General Motors and the United Auto Workers brought to the forefront some important issues about our current health insurance situation in the United States. Part of the debate was over the $100 billion cost of health care for retirees. GM’s global competition doesn’t have to worry as much about those costs because they have vey small numbers of American retirees and because their retirees in Japan are covered by state health insurance. As a result, those costs make it hard for GM to stay competitive.To deal with the problem, both sides are interested in a health-care trust fund. GM would put money into the fund, then turn the fund over to the UAW to run. GM would no longer have to deal with the unpredictable costs of health insurance and the retirees would be protected in the event something happened to the company. For example, if GM went bankrupt the trust fund could not be touched by the bankruptcy judge.
While both sides want the health-care trust fund, the debate was over how much GM would pay into the fund. GM offered 65 cents per every $1, but the UAW was asking for more. Read source Article
