Forum Examines Potential Effects of Voluntary Employees’ Beneficiary Associations on U.S. Health Care Industry

A panel of experts on Thursday at a conference examined the potential effects that a voluntary employees' beneficiary association plan established under contracts between the United Auto Workers and the Big Three automakers -- General Motors, Ford Motor and Chrysler Group -- will have on the U.S. health care system, the Detroit Free Press reports. More than 100 physicians from Michigan attended the conference, titled "VEBA is Shifting Michigan's Gears" and sponsored by the Michigan State Medical Society.

Under contracts negotiated last year, the automakers agreed to contribute about $56.5 billion to the VEBA, which UAW will manage. The VEBA, which will take effect in 2010 and remain operational for 80 years, will reduce retiree health benefit liabilities for the automakers by about $100 billion (Anstett, Detroit Free Press, 4/4). Over the next two years, UAW will set an administrative framework for the VEBA, and an independent panel of 11 members will make investment and coverage decisions for the plan, according to Mark Gaffney, president of the Michigan State AFL-CIO (Rogers, Detroit News, 4/4).

At the conference, experts said that the VEBA will affect federal and state health care policy because of the large size of the plan (Detroit Free Press, 4/4). Gaffney said that, outside of health insurers, the VEBA will rank among the top 20 health care purchasers nationwide (Detroit News, 4/4). "The VEBA will have an enormous influence on national health policy in the U.S.," Pat Richards, interim CEO of Health Alliance Plan, said.

Experts at the conference said that the VEBA will focus on efforts to contain costs to ensure that the plan remains solvent. Richards said that physicians, health plans, hospitals, health clinics and pharmaceutical companies will have to partner to improve health care delivery because of the importance of participation in the VEBA. John Billi, a professor of internal medicine at the University of Michigan, said that the VEBA "has the potential to design a plan that gives the most value to the most people" (Detroit Free Press, 4/4).

UAW also plans to use about $30 million contributed by the automakers to establish an institute for health care reform that will focus on expansion of health insurance to all residents, Gaffney said (Detroit News, 4/4).