Activists Urge State Veto Merger of HIP and GHI; Fear Health Costs Will Rise

Activists Urge State Veto Merger of HIP and GHI;
Fear Health Costs Will Rise

Marking the 43rd anniversary of Medicare's creation, a coalition of city workers and activists renewed their opposition to a plan to convert the Health Insurance Plan of Greater New York (HIP) and Group Health Incorporated (GHI) into a single for-profit entity.

The Chief-Leader/Adrienne Haywood-James A BAD FISCAL HEALTH PLAN? Coalition Against Privatization organizer Billy Wharton warned that merging the Health Insurance Plan of Greater New York (HIP) and Group Health Incorporated (GHI) would cause an undue drain on the already-tight city budget. Looking on is Health Care Now activist Katie Robbins.

The Coalition Against Privatization held demonstrations outside the state Superintendent of Insurance's lower Manhattan office July 30 and in front of City Hall the previous day.

Says Merger Will Hurt City

Hours before Governor Paterson addressed the state's worsening financial picture, CAP organizer Billy Wharton said in a speech at City Hall that turning GHI and HIP, which are currently non-profit organizations, into a for-profit firm would raise premiums and in turn hurt the city budget.

"The Mayor's Office has conducted a study, and a 1-percent increase in premiums by a privatized GHI and HIP would lead to a $27.5-million charge against the New York City budget," he said.

Mayor Bloomberg and State Sen. Thomas Duane have urged the Superintendent of Insurance to reject the conversion.

The CAP, which includes rank-and-file members of Transport Workers Union Local 100 and the United Federation of Teachers, has argued that the non-profit status of the two firms has kept health-care plans affordable for the 93 percent of city workers who belong to one of them.

"No more than 15 percent of the budget can be spent on administration costs," Mr. Wharton said of non-profit status. "It means that there's public oversight on premium increases, it means that GHI and HIP cannot go to capital markets to get financing, which means the philosophy of these two organizations is to provide health care for the maximum number of people in New York State, not to ensure shareholder return."

The firms have said that they need access to capital markets in order to stay competitive, but the Consumers Union still opposes the conversion, noting that the HIP has $900 million in reserves.

Municipal Labor Committee Chair and UFT President Randi Weingarten has said she is concerned about the planned conversion, but has not outright opposed it. Teacher and UFT Chapter Leader John Powers, a member of the CAP, said last week at City Hall that he wanted the MLC to join the Mayor in opposing the conversion.

"I hope that the Municipal Labor Committee will do their best to come out and strongly oppose this conversion," said Mr. Powers. "We know that there's $3-$5 billion worth of assets that will be made available upon conversion. We know that they are concerned about getting a piece of that money, but they should put our pockets before union funding's pockets."