Erosion of Michigan's gold-plated health benefits worsening state's economic sinkhole - MedCity Morning Read, July 13, 2009

TROY, Michigan — Software engineer Bruce Markel arrived in Michigan in 1990. He had a failed kidney, according to the Wall Street Journal, and received suchÂ comprehensive care through his employer’s insurance plan that he turned down federalÂ benefits during his recovery from a kidney transplant.

Now, Markel needs another kidney transplant. He lost his job a year ago as a consultant for Electronic Data Systems Corp., the big consulting firm that used to be owned by General Motors Corp. He pays $1,400 a monthÂ to keep the health benefits once provided by his former employer, the Journal said. That’s twice the amount of his mortgage bill.

He also spent tens of thousands of dollars for diagnostic procedures so he could get on a list for a federally funded transplant, the Journal said. Markel thinks that even though he has halved his family’s budget to $5,000 a month, the unexpected health expenses will help exhaust their savings in 18 months. “I don’t know how we can sustain this,” Markel told the Journal. “When you go from making six figures to making nothing, there are some very serious cuts.”

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Markel’s experienceÂ is emblematic of what’s going on throughout Michigan. For decades, the state’s top three automakers — General Motors, Chrysler and Ford — drew workers, in part with their gold-plated health benefits. Now as the nation’s economy slumps, two of those automakersÂ — including General Motors — are making their way through bankruptcy court. GM emerged from bankruptcy last week.

Now, years of auto-industry jobÂ andÂ benefit cuts have leftÂ auto workers — and white-collar consultants to the auto industry like Markel — without employer-provided health coverage, the Journal said. AndÂ now that the state’s largestÂ employer has swung to loss from profit, hopes are fading that Michigan’s hospitals and clinicsÂ can weather the automakers’ decline.

Even as waves of former auto workers are retraining as nurses, dental hygienists and X-ray technicians, the state’s hospitals are freezing expansion plans and cutting jobs, the Journal said. Unpaid bills at the state’s hospitals hit $2 billion in 2007 — twice the levelÂ in 2001 — and continues to grow.

President Obama is expected to talk about his idea for a health care insurance safety net — a government-sponsored health plan — in Michigan today, the Journal said.