Health and Wealth

October 21, 2005

Details are emerging about the deal on healthcare benefits struck between General Motors and the United Auto Workers. Retirees are going to begin paying “deductibles, monthly premiums, and co-payments,” that will add up to as much as $370 per year for individuals and $752 for families. Currently, retirees only pay a $5 co-pay for prescriptions and nothing else. Current GM employees will forego $1 per hour in raises and cost of living adjustments in 2006 in order to contribute to a fund for retirement healthcare costs (GM is paying into the fund as well). This deal will save GM approximately $1 billion per year. GM plans to spend $6 billion on healthcare this year. This agreement will likely impact deals between the UAW and other manufacturers.

Healthcare is expensive. People are living longer thus using more healthcare in their retirement years. Where is the money going to come from? Where should the money come from?