Fear Impact on Employees
Activists Rally Outside GHI To Protest HIP Merger
By ARI PAUL
Chanting "they say privatize, we say organize," a group of
rank-and-file union members and health-care activists June 20 rallied
outside Group Health Incorporated'
its proposed privatization and merger with the Health Insurance Plan
of Greater New York.
Looking on at center is New York City Transit Station Agent Marty Goodman.
The rally was a part of a nationwide day of protest against health
insurance companies and the for-profit health-care system. The State
Superintendent of Insurance is considering the merger and conversion
of the two firms that provide health insurance to 93 percent of city
workers, and some union activists fear that the merger will translate
into higher health-care costs and reduced coverage. Mayor Bloomberg
has opposed the merger.
Nader Sees Conflict of Interest
"It is a system that increases premiums without limit, it increases
co-payments, it increases deductions, it increases exclusions,"
presidential candidate and longtime consumer advocate Ralph Nader said
of the for-profit health insurance system during the rally. "So this
GHI-HIP merger transfers the fiduciary responsibilities of a
non-profit health insurance system to its patients to a commercial
obligation of a corporatized health insurance company to its
shareholders, which includes the top executives. There's a serious if
not illegal conflict of interest here between the heads of GHI
converting to a for-profit corporation in return for millions of
dollars to the top executives."
Activists from Transport Workers Union Local 100 and the United
Federation of Teachers voiced opposition to the merger and blasted
their union heads for not actively fighting it. Local 100 President
Roger Toussaint, who is in favor of universal health care, has
remained silent on the merger. UFT President Randi Weingarten, who
also chairs the Municipal Labor Committee, told State Superintendent
of Insurance Eric R. Dinallo in May that the MLC had concerns about a
single for-profit entity and that the coalition was prepared to oppose it.
Questions Move's Necessity
"We don't see any financial reason why the conversion needs to be
approved," said Chuck Bell, the program director of the Consumer's
Union. "HIP has over $9 million in financial reserves and as recently
as 2005, they've purchased a for-profit HMO in Connecticut for $350
million, so this is not a non-profit health plan that's short of money."
John Powers, a Teacher at Liberation High School in Brooklyn, told the
crowd that the day before the UFT Delegate Assembly passed what he
called a weak resolution in response to the merger, despite his effort
to push a resolution that would oppose it.
"It only spoke a little about the background regarding the GHI-HIP
merger," he said. "It didn't show a great concern about the fact that
once it goes public there is a need to turn a profit - that they have
to answer to the stockholders.
According to Mr. Powers, the assembly's resolution asked for a meeting
with Mr. Dinallo and guarantees against any adverse effects on city
"Our point is: 'how can you get these guarantees'" Mr. Powers said.
"We understand how corporations work."