Monday, July 17, 2006 Health Care
Marketplace
Federal Judge Approves Retiree Health Care
Agreement Between Ford, UAW To Save Auto Company $200M
Annually
U.S. District Court Judge Paul Borman
late Thursday approved an agreement between Ford Motor and
the United Auto Workers
that would require union retirees to pay monthly premiums and annual
deductibles for health insurance, the Detroit Free Press reports (Shepardson,
Detroit Free Press, 7/14). Under the agreement, retired
hourly UAW employees would pay monthly premiums of $10 for single health
insurance or $21 for family coverage. They also would pay annual
deductibles of $150 for individuals and $300 for families, with caps on
out-of-pocket expenses of $370 for individuals and $752 for families. UAW
retirees currently pay no annual deductibles. In addition, UAW retirees
would make copayments of $10 for brand-name prescription drugs and $5 for
generic medications. Active UAW employees would defer 17 cents of future
quarterly cost-of-living raises and a 3% wage increase scheduled for
September 2006 into a retiree health care fund. In addition, active UAW
employees would make higher prescription drug copays but would not pay
monthly premiums or annual deductibles. Under the agreement, Ford would
invest $900 million over five years in new technologies that could help
preserve UAW jobs in the future (Kaiser Daily Health Policy Report, 3/1).
The agreement would save Ford an estimated $850 million annually (Baltimore Sun, 7/15). In addition, the
agreement would reduce overall Ford retiree benefit obligations by an
estimated $5 billion. In a 77-page opinion, Borman wrote, "The potential
loss of all benefits, due to either Ford's financial difficulties or
Ford's prevailing on the merits, would be far worse for all class members
than the relatively modest charges they will be required to pay"
(Detroit Free Press, 7/14).