Health Care Union Drops Coverage For Children

Perhaps you have to be familiar with New York politics to understand how truly bizarre this story is: 1199 is dropping its health care coverage for children.  1199 is the extraordinarily powerful local health care workers' union which has pushed New York State's Medicaid reimbursements into the stratosphere.  The state not only has much higher than average Medicaid enrollment, but also spends more per-enrollee than any state but Alaska.  Every time a governor tries to cut into, say, the funds for home health care workers, the union runs tear jerking ads which imply that the governor is trying to end health care for everyone in the state.

Naturally, 1199--and its national parent--were a powerful force advocating for a national health care program.  An article on their website from June speaks approvingly of PPACA as a "first step", though also complains that it didn't go far enough in creating a public option.

That article also says that "1199ers in the major health funds such as the 1199SEIU National Benefit Fund (NBF) should see little or no change in their coverage."  Just a few months later, the Journal is reporting that the SEIU is dropping its coverage for children, citing, among other things, the impact of the new healthcare law:

The fund informed its members late last month that their dependents will no longer be covered as of Jan. 1, 2011. Currently about 6,000 children are covered by the benefit fund, some until age 23.

The union fund faced a "dramatic shortfall" between what employers contributed to the fund and the premiums charged by its insurance provider, Fidelis Care, according to Mitra Behroozi, executive director of benefit and pension funds for 1199SEIU. The union fund pools contributions from several home-care agencies and then buys insurance from Fidelis.

"In addition, new federal health-care reform legislation requires plans with dependent coverage to expand that coverage up to age 26," Behroozi wrote in a letter to members Oct. 22. "Our limited resources are already stretched as far as possible, and meeting this new requirement would be financially impossible."

Behroozi estimated that the fund faced a $15 million shortfall in 2011 and more in the following years for the coverage of workers' children.

In fairness, this is not exclusively related to the new law; the union is complaining that the state has forced them to buy more expensive third party insurance, and the state is saying that they did no such thing, but that the union fund has been struggling with shortfalls for a while.  Reading between the lines, it sounds like their self-insured health fund was underfunded, and the state told them they couldn't keep operating that way.  When the budget scramble began, ObamaCare was making coverage for children more expensive, so it ended up on the chopping block.

Nonetheless, this is an extraordinary thing to hear from the lips of one of the major advocates for national health care, and for generally higher spending on government health care.  They're basically saying that the new law has made benefits more expensive, and that this is contributing to people cutting coverage--exactly the argument that opponents were derided for making during the debate.  It's like seeing Bill Bennett take to the pages of High Times with an op-ed on the costs of marijuana prohibition.

Update:  1199 writes to clarify that this is only happening to one of its healthcare funds, the one that covers low-wage home healthcare workers

To clarify -- the 1199 SEIU National Benefit Fund is a separate fund that covers our hospital workers and staff, this is the largest of the funds where dependents are covered and will remain covered. The homecare fund is a smaller fund for home attendants where the funding structure is different than the large fund. There is also a different Fund for our nursing home workers. What happened occurred only in our homecare fund, not the other funds.

The fund also says that this had nothing to do with ObamaCare:

Our Fund was compelled to discontinue coverage for dependent children solely because insurance costs continued to rise, but state funding for these vulnerable, low-wage workers did not. Instead, state Medicaid funding to the home health services sector has been cut 9 separate times in just the last 3 years.

This does not explain why a letter to their members said otherwise; I have emailed to clarify whether they are denying that they sent such a letter.