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.