The Culinary Health Insurance Is Not That Great


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As the Nevada caucuses roll around, the union representing hospitality workers in Las Vegas (the Culinary Union) has raised concerns about Medicare for All. Journalists covering this story almost unanimously repeat the line that the union currently has incredibly good health insurance but then fail to provide any specific details about it. In reality, the union’s health plan, like most other health plans, is not that great.

Premiums

For starters, the Culinary Union likes to tell journalists that their health plan has no premiums. But this is not really true.

For workers to get the premium-free coverage (meaning the employer pays the full premium), they have to work at least 240 hours every two months (approximately 30 hours a week). Workers that put in fewer than 240 hours are required to self-pay $4.74 for every hour below 240. This means that when workers put in fewer shifts, they not only bring home less income, but also have to shell out potentially hundreds of extra dollars to stay insured.

Part-time workers, which are many in the hospitality industry, who cannot afford to pay their way into the union insurance find themselves in a particularly messed up position because their hourly wages are depressed by the employer insurance arrangement but they don’t actually receive the insurance that their foregone wages go towards.

Consistent full-time workers appear initially to be the big winners from the plan because it seems like they don’t have to pay any premiums. But of course we know this isn’t true either because employer premiums also come out of worker wages. The union admits as much when it says it has had to sacrifice large amounts of wages at the bargaining table to keep their insurance plan intact.

The insurance plan documents do not detail how much employers are paying towards these premiums, but if we use the $4.74/hour lower bound suggested by the self-pay rules, that means a full-time worker is paying (through foregone wages) at least $9,859 per year in premiums. Reports about Culinary Union negotiations have pegged the average all-in hourly compensation of Las Vegas strip workers at around $23/hour, meaning that health premiums alone are gobbling up at least 20 percent of the average union member’s pay.

Out-of-Pocket Expenses

Workers covered by the health plan also face a gauntlet of out-of-pocket expenses in the form of copays and coinsurance. They pay $320 for giving birth, $540 for breaking a bone, and $350 to go to the emergency room — just to count a few in-network cost-sharing amounts.

The annual out-of-pocket limit for the plan is $6,350 for an individual and $12,700 for a family. This means that even after shelling out around $9,859 in premiums (foregone wages), a family covered by the union plan could also find themselves hit with another $12,700 in charges when they go to use their insurance, for a total of $22,559 in a year.

To repeat, these are workers who receive all-in compensation (wages, pension, health insurance) of around $23 per hour.

Medicare for All Would Be Better

Under Bernie Sanders’s Medicare for All proposal, things would be greatly improved even for the Culinary Union’s members.

Under Medicare for All, all of the union’s members would receive premium-free insurance, not just those who maintain full-time status over every two month period. No more self-paying $4.74 for every hour that you drop below the premium-free threshold. No more having your wages depressed to pay for insurance that you do not even get to receive.

Under Medicare for All, the upwards of $12,700 in annual cost-sharing also goes away. Giving birth is free. Setting a broken bone is free. Even dental and vision services are free.

Under Medicare for All, these workers would also receive a substantial pay increase. Although Culinary Union workers are paid well for the hospitality sector, their wages are still well below the national average for all occupations. This means that when Medicare for All replaces employer premiums with taxes that scale with income, this will free up cash that was previously spent on health premiums to now be spent on higher cash wages for the union’s members.

Some reporting expresses skepticism that employers will pass through their health savings as higher wages. But this reporting always omits the fact that Sanders’s Medicare for All proposal requires unionized employers with net health savings to pass through those savings to their workers. The proposal does not just vaguely gesture towards such a requirement, but spells out how to actually implement it via contract renegotiations overseen and enforced by the National Labor Relations Board.

Ultimately, people can be fickle and unions can have all sorts of motivations for taking the positions they do on policy ideas and on candidates. But it is important in all of this that we not lose sight of the fact that Medicare for All, as proposed, would provide Culinary Union members with objectively better insurance while also raising their take-home pay.