Ron Radosh

How ObamaCare and an Old Red Union Betrayed Its Poorest Workers

ObamaCare’s unintended consequences continue to grow. A little over a week ago, in a Wall Street Journal article written by reporter Yuliya Chernova, readers learned that “one of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants.” Why did this happen? The union and its health fund, that of local 1199SEIU United Healthcare Workers East, an affiliate of the SEIU (Service Employees International Union), “blamed financial problems it said were caused by the state’s health department and new national health-insurance requirements.” (my emphasis)

That last line refers, of course, to the new requirements mandated by the Obama health care law that would, among other things, supposedly guarantee health care for all uninsured children. Now, the SEIU affiliate told its members last month “that their dependents will no longer be covered as of Jan. 1, 2011.” That means 6000 children of the poorest workers covered by this SEIU local will lose their current coverage, which they previously enjoyed as part of the union’s health benefits for its members.

The union’s health provider, a firm called Fidelis Care, would no longer cover employees, since the union had what its officers called a “dramatic shortfall” between employee contributions to the fund and premiums charged by Fidelis Care. The union had pooled contributions from several home-care agencies and then bought insurance from Fidelis.  As union officials explained to its members, the “new federal health-care reform legislation requires plans with dependent coverage to expand that coverage up to age 26,” and that meant the union’s “limited resources” that were evidently already stretched “as far as possible” would now require extended benefits that “would be financially impossible.”

To put the double-speak more plainly, ObamaCare made health care impossible to provide for its members — the poor and the working-class that supposedly the new ObamaCare was meant to benefit. The reality, Mitra Behroozie, executive director of the union’s benefit and pension funds, explained, was that the union fund already faced a $15 million shortfall in 2011 that would only grow larger if workers’ children were to be covered.

Because of ObamaCare, New York State now required the fund to participate in what is called the Family Health Plus Buy-In Program, which since 2008 was supposed to give the poor state assistance to buy health care coverage. But instead, as Behroozie put it, “they raised insurance rate increases without any increase in funding, and then cut Medicaid funding to the same workers nine times in the last three years.”  The State of New York, however, replied that it did not force 1199 to buy into any plan, and that the union’s actions had been its own choice.

Part of the problem, the Fidelis head explained, is that the covered workers who will no longer have insurance for their dependents are home health-care workers and attendants, who get sicker than most people because of where they work. In other words, the insurer loses when he gives these people health care premiums, which is why they raised their rates by 60%! Yet employer contributions remained constant, so the benefit fund responded by cutting the roles of eligible members. So while the big unions like the UAW get special deals to exempt them from new rules that hurt their relatively well–off union members, the ones that lose are the hardest working and lowest paid health-care attendants, whose rates go up and whose children now lose any health insurance.

As we all know, this union, an SEIU affiliate, was among the largest to fight during the election for the agenda of the Obama administration, and in particular, to support the new health care legislation.

There is also another ironic component that has not been noticed, and hence, I am bringing this to the attention of PJM readers. The local whose members are now suffering is the descendant of the most well-known Communist-led union in the New York City area — the original Local 1199 of the Drug, Hospital and Health Care Employees, originally created as a small drugstore workers’ union by the Red labor leader Leon Davis decades ago.

Writing in the New York Times Book Review on September 24, 1989, political reporter Joe Klein (now of Time magazine), called its members “the humblest of all laborers, the bed-pan carriers, the bottle washers and laundrymen” who were “overwhelmingly black and Hispanic.” Of course, they still are in our present times. Hence back in the heyday of the civil rights movement of the 1960s, they took to the streets in a series of dramatic strikes that led to organizing success and major press coverage. Klein comments about them:

“But there was a more subtle romance at work here as well: the organizing of the hospital workers was the last dance for the generation of… tough-guy labor organizers-many of them Communists-who had helped create the C.I.O. in the 1930’s and were then purged when the Cold War began.”

Klein notes accurately that its first professional organizers, Leon Davis, Elliott Godoff and Moe Foner, were among those who survived what they called a “witch-hunt”  by, as Klein puts it, “hiding out in a small ‘progressive’ pharmacists’ local, and who represented the most benign face of a malignant ideology.” The top man, Davis, Klein notes, was fortunate to stage these strikes at a moment in New York City’s past when “the state was flush and willing to pay for the contracts he won.” Strikes would be called, hospitals would say they faced chaos and closure if demands were not met, and the state treasury would step in with cash to cover the new high bills.

Now, so many years later, New York State is even in worse shape than it was in the 1970s, when the arrangement first began to fall apart. As for the union, which then faced a major split between its original Marxist-Leninist leaders and a new group of black nationalists, Klein notes:

“Mr.Davis had constructed the union in a classic Marxist-Leninist fashion, with a strong central ‘politburo’ and a weak assembly of union delegates. He handpicked his successor, …whom he groomed for many years and expected to control after formally relinquishing his title.”

As so often happened, things did not work as the union’s top old commissar hoped. The new leader had different plans, and she moved quickly to purge the old Reds out of the leadership, and the rest of that group’s supporters. As time passed, that leader would also be replaced. One thing remained constant .. the SEIU was still on the left fringe of the union movement, and remained so as part of outgoing head Andy Stern’s SEIU, which eventually took it over. As Klein concludes his review of a book about the union, “The story of 1199 remains a metaphor…for the sad journey of American Communism, a twisted paternalism that ultimately lacked sufficient faith in the workers it sought to serve.”

So add my own conclusion to Joe Klein’s old one: Andy Stern’s SEIU, the well-known ACORN partner and most radical of the public sector trade union movement, still knows how to work for a supposedly beneficial universal health care program, which in reality means worse health care for the many and great health care for the wealthy, who can opt out of the system and buy whatever medical care they need at the highest fees possible. Promising health care for all and especially the poor, its own union moves to hurt its own poorest members, blaming the development on the very health care program they worked for and supported, and that has led health insurance premiums to skyrocket.

It is indeed another travesty in the sad journey of American radical trade unionism, brought up to date for the 21st century.