They weren’t ready to hug each other, but when the president of the nation’s largest union and the chief executive of the world’s biggest retailer joined together to talk about the need for a new American health-care system, people took notice.
And what was worth noting about a press conference this week in which the longtime adversaries—Wal-Mart Stores Inc. CEO Lee Scott and Service Employees International Union President Andrew Stern—both called for the virtual scrapping of the employer-based health care system by 2012?
“What business and labor seem to be agreeing on more and more is that everyone needs to be covered and it can’t be done with a system designed in the 1940s if America is to be competitive in a 21st century global economy,” said Sen. Ron Wyden, and Oregon Democrat who has introduced legislation that would sever the link between employers and health insurance, requiring all Americans to buy health policies directly from insurers.
The issue is also becoming an important theme of the 2008 presidential election, with Sen. Barack Obama calling for universal health care as he launched his candidacy on Saturday.
Beyond the high-profile pairing of Scott and Stern, health policy experts have been impressed by an ever-growing coalition of strange bedfellows who are beating the drum for universal health care coverage—a potential sea change on an issue that proved to be dangerous political dynamite for Bill Clinton’s presidency and has been almost taboo on the national political stage for more than a decade.
“There really is a kind of critical mass that is being reached and there’s a moment I think where people stop saying are you for universal health care or not, and they say what sort of plan are you for,” said Leif Wellington Haase, a health policy analyst at the Century Foundation, a New York think tank.
Scott and Stern were joined by executives from AT&T, Intel, Kelly Services and other union leaders and public policy groups. While steering well clear of anything that smelled at all like a definitive policy proposal, the participants kicked off a campaign designed to essentially bury the nation’s employer-based health care system, replacing it with a plan that will somehow ensure universal coverage.
Scott and Stern stayed on opposite sides of the podium. And Stern made clear that he didn’t intend to let up his criticism of the company’s labor practices. But the pairing underscored the depth of frustration and fear surrounding rising health costs, analysts said.
Executives and union leaders alike “would prefer not to have to continually put in more and more money every year into health insurance,” said Joseph Antos, a health policy analyst at the American Enterprise Institute. “Some of that money would make attractive wage increases for the workers and if that were available that would make everybody happy.”
“But of course it’s the health costs that are eating up most of the productivity gains that we’ve seen in the last two years,” Antos said.
Stern is on a mission to corral unlikely allies. Last month, the SEIU teamed up with the Business Roundtable, an organization that includes the CEOs of the nation’s largest companies, and the AARP to announce a coalition dedicated to pressing for health care reform.
Stern, in an interview, said he was prompted to reach across the table to his traditional foes by the response he got from business groups he was addressing last year in which he argued that the employer-based health system was dead. “Shockingly—in my experience—people actually thought it made sense,” he said.
He decided last summer to take an even more direct approach by putting his call to arms in an op-ed piece for the Wall Street Journal while also sending letters to the CEOs of the Fortune 500. Again, the reaction was positive, and Stern began organizing a core group of people ready to call for change in a public forum.
Along the way, Stern was surprised to hear Wal-Mart’s Scott say publicly that it was time for business and labor to work together on health care. “Surprised would be an understatement,” he recalled. But it was when Wal-Mart joined the group, he said that, “[I]t was clear we had critical mass.”
Others have been busy as well. America’s Health Insurance Plans, a lobbying group for insurers, joined forces last month with Families USA, a left-leaning health advocacy group, and numerous other health organizations to press for a plan to extend health coverage to the uninsured.
Meanwhile, California Gov. Arnold Schwarzenegger is pressing for a plan that would ensure coverage for the state’s uninsured, taking a page from Massachusetts, where former governor and Republican presidential contender Mitt Romney teamed up with a Democratic legislature to implement the nation’s first statewide universal coverage plan.
On the campaign trail, Democratic presidential candidate John Edwards has been the first out of the gate to outline a universal health care plan. Edwards’ proposal would require a tax hike on households earning more than $200,000 a year to help fund extending coverage to the uninsured.
Other presumptive Democratic candidates, including Sen. Hillary Clinton of New York, the architect of the Clinton White House’s health plan, and Sen. Barack Obama of Illinois are expected to cautiously outline plans of their own.
The devil is in the details
Recent developments have caused some indigestion among conservatives. Although Scott and other executives haven’t endorsed a government-controlled, single-payer health plan, they fear that a labor-led push for overhauling the nation’s health-care system would inevitably mean bigger government, higher taxes and less patient choice.
“Seeing Lee Scott on the same stage with Andrew Stern calling for universal health care coverage reminded me of the old [Leninist] maxim that a capitalist will sell you the rope used to hang him,” said Pat Toomey, a former Republican congressman who heads the Club for Growth, a conservative political action committee.
President Bush has proposed ending the tax deductibility of employer-provided health insurance, replacing it with a standard deduction of $15,000 for individuals and $7,500 for individuals. That would give workers who buy their own insurance the same tax treatment as those with employer-provided coverage.
Backers say the plan provides an alternative that would facilitate the development of a health insurance market for individuals.
But Republicans need to do a better of articulating the appeal of the Bush plan and other market-based proposals, Toomey said, or “Democrats will keep gaining traction with this idea of socialized medicine much to the detriment of health care and our economy.”
It’s worth noting that corporate executives, union leaders and others aren’t ready to advocate any detailed proposals, experts say. That’s in part due to the fact that they likely remain far apart on what the ideal replacement for the current employer-based system should look like.
“It’s just not that hard to get an agreement about principles, it’s a lot more difficult to get an agreement about specifics and money,” said Paul Starr, a professor of sociology and public affairs at Princeton University who was part of the policy group in the Clinton White House led by then-First Lady Hillary Rodham Clinton.
“When they can agree about money—then I will uncork the champagne.”
Amanda Austin, who lobbies on healthcare issues for the National Federation of Independent Business, agrees that for the most part the discussion so far is conceptual. “I don’t think you’ll see an overhaul and serious debate until 2009,” she said. “The money’s not here and we’re right before an election year.”