The Lessons of the Culinary Union Health Care Fight – The American Prospect

February 14, 2020

The Las Vegas-based Culinary Union (UNITE HERE Local 226) announced Thursday afternoon that they would not endorse a candidate in the Nevada Democratic presidential primary, days after escalating attacks on Bernie Sanders over his Medicare for All plan.

“We’re going to endorse our goals,” said Geoconda Argüello-Kline, the union’s secretary-treasurer, in a press conference Thursday. The goals include immigration reform (a majority of union members are Hispanic), living-wage jobs, and preserving the Culinary Health Plan, which the union and its members view as gold-standard coverage.

The non-endorsement ends days of rising tensions. Argüello-Kline said Wednesday that Sanders supporters “viciously attacked the Culinary Union and working families” in retaliation for their position. This sent every other candidate in the field rushing to the union’s side to condemn online harassment. Sanders on Thursday sought to lower the temperature, calling on his supporters “not to engage in bullying or ugly attacks.”

Culinary Union leadership ran into the problem outlined in prior Prospect reporting: there simply wasn’t a candidate for them to endorse. Sanders and to a lesser extent Elizabeth Warren support health care reform that they have rejected. Pete Buttigieg and Amy Klobuchar have little resonance among people of color. Mike Bloomberg isn’t competing in Nevada. Tom Steyer gave it his best shot, but ultimately didn’t have the stature to gain the endorsement.

The natural choice was Joe Biden, who already holds the endorsement of State Senator Yvanna Cancela, the longtime political director and organizing engine for the Culinary Union. At the press event, Argüello-Kline mentioned Biden by name (“We’ve known Vice President Biden for many years … We know he’s been our friend”), and Biden scheduled an event on Saturday at the Culinary Academy, a leadership training site, perhaps in anticipation of the endorsement. But his lackluster showing in the first two primary states killed the chances of having the biggest and most important union in Nevada hitch their wagon to a falling star.

The union did accomplish one objective: returning Medicare for All back to the forefront of the Democratic primary, where it’s been off and on for over a year. Steyer’s ad mirroring the union’s stance (saying his health care proposal “protects union-negotiated plans and allows Nevadans to make their own health care choices”), and other campaigns aligning with the union, will surely make this a major debate topic next week in Las Vegas.

One confounding element here is that Sanders has already customized his Medicare for All plan in an attempt to alleviate these concerns, allowing unions to negotiate for “wrap-around” services and to ensure that employer savings from cheaper health care costs flow to union members as wages or benefits. The Culinary Union using so much negotiating power on top-notch health care does constrain what the casinos pay its low-wage workers, and taking health care out of the equation could boost pay. Several union leaders, including Sara Nelson of the Association of Flight Attendants, have noted this in their support of Medicare for All. The experience of striking United Auto Workers losing health care coverage while on the picket line hits home that union health plans are a constant struggle, effort that could be put elsewhere.

The question remains, therefore, why the Culinary Union is so steadfast to hold onto its health plan. After discussing with several experts, this is a best sketch at the answer.

First and foremost, most members (though not all) love the coverage, which is excellent in the context of current employer-sponsored insurance. The union provides medical, dental, vision, and prescription drug coverage through its own multiemployer Taft-Hartley health plan, the Culinary Health Fund, which serves 139,000 members and dependents. It’s free of a premium if the employee averages 30 hours a week every two months.

It does not approach Sanders’s vision of Medicare for All. Drawbacks include co-pays for some services, prior authorization for selected care, restrictions to “allowable charges” that only the plan determines, and eligibility rules that can cause part-time workers to have to pay in to keep the coverage. “The end result is that some workers will pay more, some will struggle with a bureaucratic workload, and some will have no coverage at all,” says R.J. Eskow, a progressive radio host and writer who spent many years in the insurance underwriting and pricing business.

Still, the comfort and security of a relatively stable and solid plan does have an attraction over the unknown. Opponents of health care reform have run this playbook forever, stoking fear among the public about the devil they don’t know and causing people to cling to the devil they do. In the Culinary Union’s case, the familiar is, relatively speaking, quite a good plan built through years of bargaining.

Critically for members, the union runs its own high-quality 24-hour health center and two pharmacies, exclusively for members. Without this in place, health care would be quite difficult for members to obtain in the Las Vegas area. The Nevada Medical Center gave the state a ‘D’ for access to health care in its 2019 report card, with only 200 physicians per 100,000 residents, well below the national average.

This entrenches membership and union leadership in the status quo in several ways. First off, Nevada is a right-to-work state (disappointingly so, given the Democratic trifecta in the legislature), where members can simply choose not to pay dues. So the Culinary Union must offer superlative benefits; health care coverage that includes an entire health network they couldn’t otherwise access does that job.

The Culinary Health Center has over 300 employees, to say nothing of the pharmacies. The Health Center operates in partnership with Keck Medicine at the University of Southern California; but the board of trustees in the multiemployer plan includes half union employees, and the union has a robust staff of plan administrators. It is not uncommon in Taft-Hartley plans to see relatives of leadership on the job; Bobbette Bond, the wife of Unite Here international president D. Taylor, is an employee of the Culinary Health Fund. But even non-relative staff employees are important to the union’s power and reach. The entire purpose of a union is to advocate for its members; in this case, some are tied up in the health fund.

In other words, the union plays the role of a business, with profits and employees and an aversion to competition. There’s nothing necessarily corrupt about it; revenue generation can fund more organizing. But it certainly motivates the union to hang onto and maximize the business. To take one example, the self-run pharmacy allows the union to get reimbursed twice by its pharmacy benefit manager: once as a health plan and once as a pharmacy. Perhaps for this reason, the union steers members into the pharmacy by offering free prescriptions, as opposed to co-pays at retail pharmacies.

Having unions control welfare benefit payments, known as the Ghent system, can work quite well. But once a union gains that control, it’s harder to relinquish such a major asset. This has been a persistent problem for health care reform; there are stakeholders on all sides wanting carve-outs and self-preservation. The logic of rebuilding the system from scratch doesn’t move those who see their privileged corner under threat.