The accelerating costs of prescription drugs and hospital care are the twin forces behind Premium $hock. Health insurance companies must recoup those exploding costs. And that's what has working Americans worried sick.

Exploding insurance premiums make health care benefits the top issue in contract negotiations. A 15 percent increase in one year may be manageable, but 15 percent each year of a three-year contract increases costs by 45 percent. That leaves far fewer dollars on the table for wage increases or pension improvements, and puts tremendous pressure on employers to make employees pay more for health coverage.

A Health Affairs study found that employers seek to "shift a greater portion of the health care bill to patients by increasing deductibles and co-payments and 'consumer-driven' health plans." Unions will have to work with employers to find innovative ways to keep   costs down without shifting the burden to members.

Snake Bit by COBRA
Many employees covered by health insurance plans can continue to get health benefits for a limited time after they lose their jobs. That legal right comes from the Consolidated Omnibus Budget Reconciliation Act, nicknamed COBRA.

COBRA is not cheap. Nor does it last forever. And its limitations are evident in these two real life stories of IAM members from America's heartland.

Lonnie Ward
With only five months to go before he could leave with a full retirement, Lonnie Ward was laid off from his transportation job at Boeing. His retirement benefits would have covered the medical and prescription costs associated with his own medical issues and his wife's multiple sclerosis.

But the Boeing Company shifted those health insurance costs to the government. "Some people got laid off with only two weeks to go for a full retirement," said Lonnie.

Lonnie's wife of 44 years, Sharon, was laid off from a white-collar position at Lear Jet six weeks after his layoff. They were both covered under Lonnie's COBRA at a cost of $528 each month. Their COBRA eligibility runs out this summer, however. And so will their unemployment checks.

"If we were in our 50s, I don't know what we would do," said Lonnie. "But soon we will have retirement to fall back on."

By then, Lonnie and Sharon Ward will have paid out $9,500 for a Federal government-sponsored insurance program called COBRA. They will have received - since both qualified for regular unemployment but not the extended unemployment recently passed by Congress - $17,317 in UI benefits from the State of Kansas.

The net government benefits - unemployment checks and a COBRA policy - to these two unemployed Americans is a mere $7,817 spread over a year and a half. That works out to less than $50.10 per person per week!

Robin Young
When Robin Young was laid off from her job as a materials dispatcher from Boeing in Wichita, Kansas, she faced a critical decision - whether or not to keep her health care by paying costly COBRA payments.

She felt fine, and under the IAM agreement, she would get six months of health insurance coverage from Boeing for only about $55 per month. Once Boeing's coverage ended, however, COBRA would cost her $398 a month. Robin had a gut feeling she should pay the COBRA. "My instincts are pretty good," said Robin. "Thank God."

Only a few months after she got laid off something felt wrong. In one three-day period, a dime-sized lump in her breast grew to a half-dollar size. The doctors diagnosed cancer. Treatment began immediately and so did Robin's self-described "trip to hell."

Robin's family faced their own troubles. Her son, daughter, and sister were also laid off in 2002.

Robin could not find a job because employers "don't want to deal with a sick person." Trained as a respiratory therapy technician, her low resistance levels meant taking a job in that field was out of the question.

Continued unemployment and $398    per month in COBRA costs soon produced a financial crisis. She sold her home and now Robin is living off those proceeds plus the money she saved while at Boeing.

Robin knows "the road will be tough from here on out."  But she remains undaunted. "Nothing will stop me from moving forward, though," said Robin. "Especially after what I've been through so far."

Her family, friends, and her union stand ready to help. "You couldn't ask for a better group of people than the members of Local Lodge 834," said Robin. "They took up collections, sent cards and flowers, and sometimes they called to see how I was doing. They are just like family."

Doctors won't know until July if Robin's cancer treatments succeeded. She worries what will happen if they haven't - she is already four months into the 18-month limit on COBRA.

Back|Next|Cover Story|Contents