By DON McINTOSH, Associate Editor

It’s the number one issue for unions at contract bargaining time: Unceasing growth in the cost of health care insurance is eating up wage increases and forcing unions to fight hard just to keep the same level of employer-paid health coverage.

That reality has driven unions to look for a political solution, with the result that unions have become perhaps the best-organized lobby for the public at large in its desire for greater access to health care and a more tolerable cost.

The issue long ago passed crisis proportions: 43 million Americans were without insurance last year (600,000 in Oregon), and premiums for those who have health insurance have gone up 87 percent in the last six years, now averaging $956 a month for family coverage — more than the entire income of a full-time worker earning the federal minimum wage of $5.15 an hour.

America’s current health care system is famous for costliness, inefficiency and inequality. It’s a crisis that calls out for national solution, but so far Congress has failed to effectively address it, above all because of the political power of the medical-industrial complex — the tangle of entrenched economic interests that benefit from the status quo: insurers, hospitals, drug companies, doctors, medical equipment manufacturers and on and on.

Those worst off under the current system, the uninsured, aren’t organized into any effective lobby. So political support for a solution is most likely to come from stakeholders like business and labor.

Health care costs were an estimated $2.2 trillion last year — about one-sixth the value of everything produced in the United States. In effect, one-sixth of the economy is holding the other five-sixths hostage by resisting reform, because the 61 percent of employers that provide coverage view health care as a business expense they can’t control.

Nationally and locally, there’s a sense that this could be the year major reform finally comes. The return of Democrats to the majority in Congress and the Oregon Legislature has raised the hopes of health care reformers. Congress is expected to look at several far-reaching solutions, and the Oregon Legislature is likely to move ahead with major statewide reforms that could serve as an incubator for national reforms.

Incoming U.S. Senate Health Committee Chairman Edward M. Kennedy (D-Mass.) and House Commerce Committee Chairman John Dingell (D-Mich.) will push a proposal to expand Medicare to everyone under 65 (Medicare currently makes health coverage available to everyone 65 and over.) Congress started Medicare in 1965 as a single direct payer program and later added a private insurance option that has proved more costly. The Kennedy-Dingell expansion would return to the original model. It would be funded by a 1.7 percent tax on workers’ wages and a 7 percent payroll tax paid by employers.

Congressman John Conyers (D-Mich.) also will push a Medicare-for-all plan, with the difference being that Conyers’ bill would put private health insurers out of business. Conyers’ proposal, endorsed by more than 200 labor organizations, would be paid for in part by a modest payroll tax, a small tax on stock and bond transactions, and increased personal income taxes on the top five percent of income earners.

U.S. Senator Ron Wyden (D-Ore.) previewed his own detailed proposal Dec. 13, backed by an entourage that included Andy Stern, president of the 1.8 million member Service Employees International Union, and Steve Burd, CEO of Safeway.

Wyden’s plan would leave insurers and the entire current system intact, but relieve employers of the burden of finding and managing health care benefits. Instead, employers would be required to “cash out” the value of existing health benefits over a two-year period, giving the money to all employees as a pay raise. After that, all employers would be required to contribute about 25 percent of the cost of their employees’ premiums, with the remainder paid by individuals and the federal government through individual tax credits and direct subsidies.

It would be a health care benefit for all Americans equal to what members of Congress currently have, paid for on a sliding scale. Individuals earning less than the poverty level would pay nothing, while everyone earning up to four times the poverty level would get some subsidy. [The poverty level now stands at about $10,000 for an individual, $20,000 for a family of four.] Insurers would have to offer the same rate to everyone for the basic health benefit — no longer could they consider occupation, gender, genetic information, age, or pre-existing condition in price or eligibility.

To become law in the next two years, any of these proposals would have to be signed by President George W. Bush, and they each differ significantly from the approach he favors — a shift to tax-free individual health savings accounts.

Meanwhile, the Oregon Legislature may pass reforms of its own, and will be looking at a grab bag of ideas, some major, some minor.

The highest-profile proposal to take concrete form thus far is the one developed by the Oregon Senate’s special Commission on Health Care Access and Affordability, chaired by Senators Ben Westlund (D-Tumalo) and Dr. Alan Bates (D-Ashland). The commission, which included representatives from labor and business interests, met throughout 2006 and released a draft in early December.

“Health care is crumbling around us,” Westlund, a former Republican and independent-turned Democrat, told the Oregon AFL-CIO Executive Board on Dec. 14. “Our health care system cannot be sustained five to seven years out. It’s collapsing in on itself.”

The Bates-Westlund proposal would create an Oregon Health Care Trust Fund, which would bargain with insurers on behalf of all Oregonians. The Trust Fund would then offer a complete health care package to every Oregonian who is currently uninsured — including medical, dental, mental health and vision coverage.

Businesses and individuals would choose health plans from the list, and would share the cost of the premiums, which would be paid to the Trust Fund. Residents earning less than 250 percent of the poverty level would have their premiums paid by Medicaid, the state and federal program of health insurance for the poor. Many details of how the program would function still have to be worked out.

The Bates-Westlund proposal may seek access to money spent now by Medicare in Oregon, borrowing an idea from former Oregon governor John Kitzhaber. Kitzhaber and his group the Archimedes Movement have argued that the United States could provide a basic health benefit to every American for the money that’s already being spent by the federal government on health care, if the money in Medicare, Medicaid, Veterans Affairs and the employer tax deduction were combined and spent effectively. Kitzhaber has proposed that Oregon lead the way by seeking waivers to use that money differently.

Bates, a medical doctor, told the AFL-CIO that their bill would focus on preventable care and keeping people out of the hospital.

He said under the current system, “insurance won’t pay for preventive care, it won’t pay for medications ... but if you need a stent or a new kidney, they’ll pay for it.”