Health Care Cost Turning Point

The new contract between GM and the UAW may be the turning point in health care costs in this country. In case you've been under a rock this week the deal turns over the liabilities for the health care of all GM retirees to a new trust that will be funded with $35 billion from GM. The catch is that it will be up to the trust to set and manage the health care benefits.

This is a radical break from the UAW's reliance on job-based insurance and it will be very interesting to see how this plays out in the future. It's a great deal for GM since it gets out from under a huge and growing liability so it can become more competitive. For UAW members, especially aging retirees, it may be the dawn of an unpleasant new day.