Automakers Jobs Moving to Canada Because of High Health Costs—Why We Need Health Care Reform in California--and What We Don’t Ne

[courtesy of California Progress Report]

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

The Associated Press reports that the Canadian Auto Workers have signed a three-year contract with Ford. Chrysler is next.

High health care costs have been a primary source of angst for automakers, who two years ago made headlines by appealing to Washington for some kind of help. Since 2005, though, automakers' health care costs have declined by $2.1 billion. The United Auto Workers agreed to some changes, that resulted in increases costs for retirees and workers.

Salaried workers have seen premiums increase as much as 30%, out-of-pocket maximums increase by 33% to $4,000, and a tripling deductibles from $500 to $1,500.

All this -- and automakers are still moving to Canada.

Why We Don’t Need High Deductible Health Insurance in California

Health Affairs has just released an excellent new study, which challenges the notion that high-deductible health plans with their low premiums are offering the otherwise a good alternative to going uninsured. Based on this research, and an updated report from the Government Accountability Office tells us who does benefit from these plans.

The Health Affairs study just confirms what advocates have been saying -- and debunks what insurance companies argue: high deductible plans are not a sound choice for families who are uninsured. One medical emergency would leave these families vulnerable to tens of thousands in medical debt, if not bankruptcy.

Among the report's findings:

• Only 21% of households with one uninsured person could cover a $1,000, along with their other obligations.

• No more than 9 percent of households with one uninsured person could meet the out-of-pocket maximum of $5,000.

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