COST: Health Care and the Crisis in Detroit
Speaking of the auto bailout (well, we weren't, but everyone else seems to be...)
It's a cliché by now to talk about how carmakers spend more on health care than they do on steel, but clichés stick around for a reason. What's happening now in Michigan is not just another blow to our manufacturing sector but another crisis for our whole economy. And our overpriced, inefficient health care system is a big component.
CNN just took a look at the health care element to the Big Three crisis, and quoted New America health policy director Len Nichols on the costs, in particular, of retiree health care. U.S. carmakers used to have a bigger share of the market, and they had more workers than retirees. Now, they have foreign competitors with lower health care costs, and they have more retirees than workers (two times as many retirees in some cases)
GM is now paying about $1,500 per vehicle for health care, and two-thirds of that is for retirees.
PS As you know, this isn't a new topic. Here's a look back at what Health Populi had to say last year, and Huffington Post in 2006...
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