VEBA-The New Health Care?

Recently the UAW and GM agreed to a new 4 year agreement that would establish a Voluntary Employee Beneficiary Association (VEBA) that would have the UAW cover its' members. While the jury is still out on whether this is a good idea or not one has to wonder if this will be the way to cover health care for employees. A VEBA is basically a trust and as a trust it can have all kinds of investments made with the money to help it grow. Helping it grow will enable the individuals enrolled in the VEBA to continue to get coverage. While I am personally unsure as to actual mechanism to make it function and remain viable I have done some research on others who have tried it. Caterpillar tried something very similar in 2004 and it the trust was bankrupt or near bankrupt by late 2005. That was not so reassuring but most of Caterpillar is not Union and that might make a difference. With the UAW looking over it there will be accountability and amounts to fund it can be negotiated. While GM funded the VEBA with anywhere from $26 billion to $61 billion there are 300,000 plus people to cover. GM was able to reduce the amount of cost per car so it could be more profitable we will have to see at what cost to the member. Chrysler has now done the same thing with the UAW and Ford is next. I hope over the next year we can get a good look at how it is working. Who knows it might be the next available option to cover those that are uncovered. It might even become an answer to the national health care crisis we face as we go into the 2008 election cycle.