VEBAs will make health care impact (a temp bridge to universal perhaps?)

[Omaha Steve]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080404/AUTO01/804040323/1148/AUTO01

Friday, April 4, 2008

Funds run by UAW will be formidable investors
Christina Rogers / The Detroit News

NOVI -- A union-run trust fund being set up to cover retiree health benefits for Detroit's Big Three could reshuffle tens of billions of dollars in health care spending, as it puts the United Auto Workers in charge of buying medical coverage for more than 720,000 current and future retirees, according to experts who spoke Thursday to a medical society conference.

The fund, known as a Voluntary Employees' Beneficiary Association, or VEBA, will make the UAW one of the nation's largest non-insurer purchasers of health care and a formidable investment operation, ranking among the country's top 20, said Mark Gaffney, president of the Michigan State AFL-CIO.

Organizers billed the conference, hosted by the Michigan State Medical Society, as one of the first forums to discuss the implications of the trust fund on the health care industry.

"This topic has the potential to alter the way health care is financed and potentially how it's delivered for a huge segment of the patient population," said Dr. John Billi, an associate vice president of medical affairs for the University of Michigan.

Last year, the UAW agreed to take on the responsibility for hourly retiree health care beginning in 2010 for all of the Big Three, allowing the automakers to wipe the financial liabilities from their books. General Motors, Ford Motor Co. and Chrysler LLC will contribute a total of $56.5 billion to the fund, which will be managed by the UAW.

The money will pay the health care bills of UAW retirees. What doesn't go to pay benefits will be invested, to create a source of income for the fund.

FULL story at link.