Senate Bill 5 health care analysis
Senate Bill 5 creates a divide in Ohio between people who support the bill and people who oppose the bill. Most people let their opinions sway due to public outcry by one group or the other, and sadly most people remain in the dark about what SB 5 will accomplish.
The bill affects more than 350,000 unionized public sector employees in Ohio including firefighters, teachers and police officers. The bill restricts collective bargaining rights. Before SB 5 passed, collective bargaining included wages, benefits like health care and pensions, workplace conditions, staffing limitations and other union-related concerns.
When state Sen. Shannon Jones first proposed the law, collective bargaining rights for health care coverage were abolished. The first draft placed a limit at 80 percent on the amount the government would pay for health care plans for public employees. The new bill set the limit at 85 percent, which is the same as some former laws.
According to the Ohio Department of Administrative Services’ fiscal analysis of SB 5, the estimated savings in Ohio for public sector employees’ health care under the new law would be $97.9 million. State government employees already pay 15 percent for their health care, while many local governments pay more or all of the public employees’ health care benefits, so the savings will come from local governments. Liberty and Brookfield townships pay 100 percent towards their employees’ health care plans.
John Russo, coordinator of the Labor Studies Program and co-director of the Center for Working-Class Studies at Youngstown State University, and his colleague Sherry Linkon gave a testimony opposing SB 5 to the Ohio State Senate. Russo said no accurate estimate for the actual health care savings or hard numbers exist. He said that conservative groups wrote SB 5, not Jones.
Russo said SB 5 places a flat rate on health care that doesn’t include deductibles, deductions, co-pays or other things typically in a health care plan. He predicts cost-shifting for public employees’ incomes to go toward health care, as well as greater out-of-pocket expenses for deductibles and co-pays.
SB 5 supporters claim the bill will help balance the state budget and keep government spending on track.
Russo said he believes otherwise.
“It’s not about the superficial stuff. It’s about raw politics,” Russo said. “If they can’t show the actual cost savings, then it’s got to be … there’s something else going on.”
He said if incomes of public workers drop, they have less disposable income to spend in the community. He said local businesses depend on income from public sector employees.
Russo suggested to the Senate committee that Ohio should follow Minnesota’s plan to cut budgets and increase taxes. But he said the committee wouldn’t entertain this idea.
Linkon said some SB 5 supporters say workers in the private sector lost these things, so the public sector should lose them too.
She adamantly responded, “No. You lost them, and we should be fighting to get them back for you. Let’s get everybody to have health care, a decent pension, a decent wage, … safe working conditions and a voice in the workplace.”
“Unions are the best institution we have to protect the interest of the working people in the workplace,” Linkon said. “The existence of unions is good for society.”
Unions represent millions of Americans. Linkon said that when unions are undermined, the political voice of the working people is taken away. She said wealthy people have more access to local leaders than the working class. The only way for the working class to influence leaders is when they come together in a large group and pull funds. But SB 5 supporters say unions have too much of a say in the political process.
In health care terms, Linkon said that public sector employees would have two options: pay more for their health care plan or take a plan with fewer benefits.
“I don’t think people will lose health care, but the quality of health care they get will go down,” Linkon said.
SB 5 supporters argue that health care costs will go down across the board for everyone. If public sector employees pay nothing for coverage, they are much more likely to go to the hospital or doctor for minor issues. The public sector workers will pay higher deductibles and co-pays, which will deter them from needlessly spending government money. The insurance companies could potentially lower the prices for all workers.
Many SB 5 supporters say government can no longer support the costs for public sector workers. The wages and benefits given to public sector employees depend on the amount of tax revenue paid by private sector workers.
“In Cincinnati, union contracts have caused the city’s personnel costs to grow at about 18 percent annually. Taxes are not going up at the same rate. In fact, they are going down,” said Jeff Berding, a Cincinnati city council member and SB 5 supporter, on the Ohio Republican Party website.
Other political leaders agree.
“The mayor and his entire administration appreciate the dedication and commitment of our employees as they keep our streets safe, fight fires and save lives, repair broken water mains in freezing temperatures, fix broken sewer lines, provide safe drinking water, take care of our parks so kids can play ball or swim, provide assistance to a struggling family to put a new roof on their home and countless other examples of the good work our employees do on a daily basis,” said Stephen Herwat, deputy mayor of Toledo, on the Ohio Republican Party website. “But the practical reality is that we can only afford to pay these dedicated public employees within the constraints of the revenues that our taxpayers are willing and able to pay. The collective bargaining act must be modified to reflect the ability of local governments to pay for the terms of the contracts.”
Russo and Linkon agreed that SB 5 attacks the public sector unions and working-class people across the country. Russo said communities could lose transit funds, among other things.
“It’s bad. It’s really bad,” Russo said.
The outcome of SB 5 will reveal itself in the coming months and years. The war between the opposition and supporters will continue.
But one thing remains a fact: The U.S. needs to pay employees as well as balance budgets and decrease deficits.