The Regional Transportation District board should be commended for its new policy that ensures janitorial contractors will make health insurance available to their full- time workers. That’s one small step toward solving a giant – and growing – national problem.
RTD will reimburse contractors for health care premiums of up to $235 a month per employee. It’s the kind of far-sighted policy that public employers should set. As the National Coalition on Health Care reports, “Most Americans have health insurance through their employers. But, employment is no longer a guarantee of health coverage.
“As America continues to move from a manufacturing-based economy to a service economy, and employee working patterns continue to evolve, health insurance coverage has become less stable. The service sector offers less access to health insurance than its manufacturing counterparts. Further, an increasing reliance on part-time and contract workers who are not eligible for coverage means fewer workers have access to employer-sponsored health insurance.”
The loss of health insurance has contributed to the fact that 46 million Americans, 15.7 percent of the population, were without health insurance in 2004. The numbers would be far worse without expanding public assistance programs, because the number of people with employment-based health insurance dropped from 70 percent in 1987 to 59.8 percent in 2004.
The fact that publicly financed health insurance programs are expanding makes it doubly wise for employers to offer benefits. First, offering health coverage sets an example that encourages private-sector companies to follow suit. More important, public employers should recognize that if they don’t provide health insurance, then taxpayers eventually will pay for health care anyway through such public assistance programs as Medicaid.
RTD’s new policy is also a victory for the Service Employees International Union, which represents most janitors downtown. But, helpful as such actions are, in the long run America needs a comprehensive program to bolster health-care programs and financing.
Health care is now the single most important drag on American competitiveness in the world economy. General Motors spends more on health care than it does on steel in its cars. That places the auto giant and similar firms at a competitive disadvantage with foreign manufacturers whose national health-care programs cover their workers.
In a 2004 Business Week interview, Starbucks chairman Howard Shultz underscored the burden of health care costs for employers, noting that his company provides a plan for all employees working 20 hours a week or more.
“Over the next two years, we will spend more for employee health-care costs than we will for coffee,” Schultz said. “The companies that are doing the right thing by covering their employees are paying for the companies who don’t do the right thing. … Some companies that say they offer health care go out of their way to restrict part-timers’ hours [so they won’t be eligible for coverage]. And if they do qualify, they often can’t afford the upfront premium. One of the largest companies in the country is famous for this.”
Schultz was obviously thinking of Wal-Mart. But even Wal-Mart’s chief executive, H. Lee Scott Jr., called for comprehensive health-care reform in a speech to the National Governors Association in February.
“The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees,” Scott told the governors. “And every day that we do not work together to solve this challenge is a day that our country becomes less competitive in the global economy.
RTD has taken a step that should resonate with other public agencies.
