Labor Signs on to Save Medicare

In 1965, President Johnson signed Medicare into law, establishing the right to quality healthcare for millions of retired Americans. The labor movement was essential in passing this landmark legislation. It took decades of organizing—with labor working side by side with the Civil Rights and other social movements—to win one of the most robust public health programs in U.S. history.

Now, Medicare is under attack: Profiteering corporations are promoting Medicare Advantage plans as an alternative to Medicare. But Medicare Advantage is not Medicare, it is a privatization scheme that funnels tax dollars through insurance companies to move enrollees into private insurance plans, undermining Medicare.

The Labor Campaign for Single Payer is enlisting state labor federations and central labor councils in a campaign to ensure that traditional Medicare continues to be a true financial option for retirees and unions.

The Labor Campaign, working with the Puget Sound Advocates for Retirement Action, drafted a sample resolution to “Level the Medicare Playing Field.” By reining in overpayments to Medicare Advantage insurers, we can expand benefits and reduce premiums in Traditional Medicare.

State federations in Washington, Minnesota, and Maine have already passed resolutions.

WHAT’S WRONG WITH MEDICARE ADVANTAGE?

At first glance, Medicare Advantage can seem like a good deal. Traditional Medicare rarely requires patients to get their doctor’s authorization to receive treatment, and it allows patients to see virtually any provider in the country. But the program only covers 80 percent of healthcare costs. So unions must negotiate the purchase of a supplemental (Medigap) policy to cover the other 20 percent. The combined premiums cost hundreds of dollars a month.

Medicare Advantage plans, on the other hand, often have low- or zero-dollar premiums and include coverage for dental, vision, hearing, and prescriptions (though the value of these additional benefits is often much less than beneficiaries are led to believe). However, patients in Medicare Advantage plans regularly experience claim denials and are often restricted to seeing a narrow set of in-network providers.

Predictably, insurance companies seek to maximize profits by minimizing the amount of care their beneficiaries receive. The accumulated costs of paying out of pocket for expensive treatments not covered under Medicare Advantage plans can leave retirees under mountains of medical debt.

Despite the huge downsides of Medicare Advantage plans, many retirees and unions opt to participate in them, attracted by the lower upfront costs. And since retiree benefits are not a mandatory subject of bargaining, unions have limited power to insist on traditional Medicare.

UNLEVEL FIELD

Medicare Advantage plans squeeze money out of retirees in many ways, including:

• Upcoding. They claim that we are sicker than we are to increase their payment rate from Medicare and to qualify for “quality bonuses.”
• Cherry-picking. They market their plans to the healthiest of us while imposing barriers for us to actually use the care we need.

These two tactics result in the government overpaying Medicare Advantage companies by $124 to $140 billion a year. Companies use these overpayments to finance stock buybacks, shareholder dividends, and exorbitant CEO compensation packages—all subsidized by us.

The Kaiser Family Foundation found that “Medicare Advantage has never generated savings relative to traditional Medicare. In fact, the opposite is true.” We pay more for a private insurance plan that makes more money by delivering less care.

The slide into Medicare privatization is wreaking havoc on unions and retirees across the country. Corporate Medicare Advantage plans have become a tool to divide and conquer us, pitting worker against worker.

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Beware while negotiating! Many consultants and brokers receive undisclosed fees and commissions from MA insurance companies to persuade desperate employers to move retirees into MA plans. The incentives to withhold information or to obfuscate are great. Like any other subject of collective bargaining, unions are entitled to all relevant information on the proposed plans and impact on members; and you have the right to present alternatives.

WHAT CAN WE DO?

We can’t win this battle at the bargaining table any longer. Our access to healthcare has become a tool to transfer of our wealth to the corporate bosses.

Labor is uniquely positioned to help lead the way on a coordinated campaign to fight privatization, to protect and expand traditional Medicare while creating the conditions necessary to ultimately win an improved “Medicare for All.” That’s what the “Level the Medicare Playing Field” resolution is about.

It will be a lot easier to fight privatization if Traditional Medicare is expanded to cover vision, hearing, dental, and prescription drugs, and include an out-of-pocket cap on costs to beneficiaries while reducing premiums.

REPORT AND RESOLUTIONS

The Labor Campaign for Single Payer has released a report that looks at this issue from a labor perspective and offers resources and negotiations guidance when considering Advantage plans for their retirees. You can access the report, “Medicare Advantage, What Union Leaders Need to Know,” as well as the sample resolution, here.

You can also listen to the June 18, 2025, national webinar on Medicare Advantage. Contact the Labor Campaign to request an E-board briefing, as well as speakers and workshops for union meetings and conventions.

We are the only country in the world that links healthcare to employment. You lose your job, you lose your healthcare. And the bosses bludgeon us with this “benefit” when it comes to exercising our right to go on strike because once you’re off the payroll, you’re also off the employer’s health insurance plan.

It’s time for labor to call the question: Is healthcare a benefit to be negotiated? Or a necessity for everyone?

Rose Roach is the National Coordinator for the Labor Campaign for Single Payer and serves as Chair of Healthcare for All Minnesota. She recently retired as the Executive Director of the Minnesota Nurses Association.