UAW Contract With GM Reduces Health Plan Choices

The tentative contract between United Auto Workers and General Motors would reduce the number of health plans available to about 412,000 unionized workers, retirees and their families as GM tries to reduce the almost $5 billion spent last year on health care benefits for 1.1 million people, both union and nonunion, the Detroit Free Press reports. According to the Free Press, GM's UAW workers still would have comprehensive health care coverage, and if the contract is ratified, some benefits would improve.

The new contract removes all dental HMOs, all but three HMOs and all PPOs except Blue Cross Blue Shield of Michigan, the Free Press reports. The HMOs offered under the contract would be BCBS, Health Alliance Plan and HealthPlus of Michigan. Employees and retirees currently enrolled in other plans would be transferred to BCBS PPO Traditional Care Network, according to the UAW contract summary.

GM's UAW workers now pay a $10 copayment for a doctor's office visit with an unlimited number of follow-up visits annually. Under the new contract, GM's UAW workers would pay $25 per visit for five doctor visits annually under the Traditional Care Network plan, and copays for the other HMOs retained by GM also would be $25.

Some health care executives have expressed concern that GM's new limits could hurt smaller health plans and reduce competition. Richard Murdock, executive director of the Michigan Association of Health Plans, said that removing plans would "limit competition that encourages high performance and quality."

Sharon Pultorak -- a senior account executive for United Concordia, a dental HMO -- said that dental HMOs typically cover in full for cleanings, examinations and X-rays, whereas traditional coverage requires copays or full payment from the patient. Under the contract, GM will cover retiree health care until 2010, at which time liability shifts to UAW under a voluntary employees' beneficiary association. Under current projections, the benefits will not change under a VEBA, but they could be reduced if projections turn out to be inaccurate (Anstett, Detroit Free Press, 10/5).

AFL-CIO Letter Questions Cost-Cutting Efforts
In related news, the AFL-CIO on Thursday in a letter said that GM has not done enough to reduce prescription drug costs. Specifically, the letter says GM has not removed brand-name heartburn treatment Nexium from its approved-drug list, whereas other companies, including competitors Ford Motor and Chrysler Group, have removed or reduced coverage of the drug to encourage the use of generic versions. Generic versions of the drug are about $12 for a month's supply, compared with $49 or more for Nexium.

AFL-CIO since June has been discussing with GM a conflict-of-interest issue surrounding Nexium because longtime GM board member Percy Barnevik is a retired chair of AstraZeneca, the drug's manufacturer. The discussions and letter are part of AFL-CIO's campaign to "question the objectivity of health industry executives who sit on the boards of some of the nation's largest companies," according to the New York Times. The letter cited GM and 20 other corporations as large companies unrelated to health care that have high health care costs and board members who were directors or executives of drug or health insurance companies.

GM spokesperson Michelle Bunker on Thursday said that "GM's board did not have any influence over any of the decision that our pharmacy benefits manager makes regarding offerings." GM's PBM is Medco Health Solutions. Mark Fendrick, director of University of Michigan's Center for Value-Based Insurance Design, said that although PBMs created the preferred-drug lists, employers frequently change the lists to cut costs.

AFL-CIO President John Sweeney in September asked GM Chair and CEO Rick Wagoner to bar three board members from "playing any leadership role in consideration of health care matters at GM." Those members were Barnevik; George Fisher, a director at Eli Lilly; and Karen Katten, a former vice chair at Pfizer (Freudenheim, New York Times, 10/5).