[Nyclocal] GHI/HIP Merger Threatens City Workers

[William Wharton]

Friends,

The following statement has been created by the
Socialist Party USA (NYC local).  Please read and
forwarded it as widely as possible.  Critical comments
are encouraged and endorsements by your organization
are welcome.  Please consider attending and testifying
at the upcoming hearing and writing a letter as
requested at the bottom of this email.  Here we have
yet another attempt by corporate America to place
limits on our ability to live a healthy life.  It
should not be allowed to occur without some
resistance.

Peace,
Billy Wharton
SP-USA (NYC)

GHI/HIP Merger Threatens City Workers
Statement Issued by the Socialist Party USA (NYC
Local)

Should corporations have the same rights as individual
citizens?  Should the public good be prioritized over
enhanced corporate profits?  The latest case which
will yield answers to these questions is the proposed
merger of the health care organizations GHI and HIP. 
Proposed first in 2005, this merger had faced
opposition from state and city officials fearful that
it violates anti-monopoly laws.  For municipal workers
covered under these carriers the merger presents the
very real threat of premium increases and limitations
on care.

One stumbling point for the proposed merger came in
2006 after city officials calculated that nearly 93%
of all municipal workers would be covered under the
proposed merger company – renamed Emblem Health
Corporation.  Such a centralization of coverage
presents a clear budgetary threat to the city.  Each
1% increase in the premium by Emblem Health would cost
New York City $27.5 million.  This means that a single
mega-corporation would have the potential to drive the
city into a budgetary crisis.  Such a squeeze could
then filter down into reductions in vital public
services including education, transportation and
public housing.

What would motivate Emblem Health to increase health
insurance premiums?  The second-stage in the merger
agreement plans to convert GHI and HIP from
not-for-profit healthcare providers into a for-profit
company.  As stated in the conversion document
presented to the New York State Superintendent of
Insurance both companies claim to have “suffered”
under reduced profitability because their
not-for-profit status limits their ability to raise
premiums.  In addition to premium increases for-profit
healthcare providers also commonly provide tiering
schemes in which the insured are divided into
“low-risk” and “at-risk” groups each with varying
amounts of coverage and premium costs.

Remarkably the very organizations which should offer
the most resistance to this regressive plan, New
York’s municipal trade unions, have remained silent. 
Worse still, the leadership of the United Federation
of Teachers (UFT) are active supporters of the merger!
 Arthur Pepper the Executive Director of the UFT
Welfare Fund claimed that savings made by the new
mega-corporation will be “passed on to subscribers in
the form of premium stabilization.”  We should ask if
Mr. Pepper or other union officials will become
members of the new board of Emblem Health thereby
receiving healthy payouts during the for-profit
Initial Public Offering?  In addition, municipal
unions typically receive a portion of the proceeds
during the conversion to for-profit status.  Such
short-term payouts mainly benefit union officials and
will mean little once rank and file workers face a
for-profit mega-corporation intent on maximizing
profitability.

The GHI/HIP merger clearly highlights the need for a
single-payer national healthcare system.  For-profit
healthcare guarantees higher costs, coverage
limitations, has left more than 40 million people
without coverage and, in this case, even provides a
challenge to the viability of a public budget as large
as that of New York City.  While achieving this goal
of universal healthcare is vital, it is crucially
important to take actions to prevent the formation of
this mega-corporation.  In this case, the health care
of workers such as teachers, transport workers and
other municipal workers should be prioritized over and
above the right of a corporation to violate monopoly
laws in order to enhance its profitability. 
Therefore, New Yorkers are asked to participate in the
January 29th hearings about the merger and are also
encouraged to participate in the formation of a larger
popular movement to prevent the proposed merger. 
Healthcare should be a human right not an arena for
the accumulation of profits.

For more information on this issue email us:
spnyc at spnyc.org

Public Hearing – Jan. 29th, 10:00a, 55 Water Street,
New York City

Send letters of Protest to Mr. Eric R. Dinallo, New
York State Superintendent of Insurance, One Commerce
Plaza, Albany, NY, 12257 



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