By Mark Gruenberg
PAI Staff Writer
WASHINGTON (PAI)--Union leaders praised Senate Majority Leader Harry Reid, D-Nev., for crafting a comprehensive 10-year $849 billion health care revision bill but blasted his inclusion of a tax on workers’ health insurance to help pay for it.
In statements, AFL-CIO President Richard L. Trumka, the Steelworkers, AFT President Randi Weingarten and Teamsters President James Hoffa all struck that theme. Hoffa came the closest to a position -- which Trumka stated before -- that if the tax survives, labor would walk away from the legislation.
Reid unveiled the bill on Nov. 18, and scheduled a preliminary vote to open debate on it for Nov. 20. The legislation includes some sections that unions strongly support, notably a “public option:” The government-run company to compete with the private insurers, cover millions of the uninsured and help curb rising health care costs.
But Reid also kept the tax on so-called “Cadillac” plans -- those worth more than $8,500 to an individual and $23,000 to a family -- to help pay for health care. And union leaders responded that workers, union and non-union, would get hit and hurt by that tax.
The one exception to that chorus was Service Employee President Andrew Stern, whose spokeswoman explained that he wanted to praise lawmakers “or moving the process along” and would deal with specifics, including the taxes, later.
Reid’s “bill moves us closer to the historic goal of health care for America -- high quality, affordable health care for all,” Trumka said. It “takes the strongest steps yet to bring down costs. But the bill is not perfect,” because of the tax on workers health insurance, Trumka declared. The bill also doesn’t order employers to offer insurance.
“A tax on working families' benefits is the wrong way to finance health care and we will work hard to eliminate this provision” he added.
Trumka made clear that labor prefers the House-passed version of health care, which has both a strong public option and no tax on workers’ health care. The House bill taxes millionaires, instead. Reid’s plan also has a smaller tax on millionaires -- a surcharge on their Medicare tax payments -- which Trumka praised.
The Steelworkers, Weingarten and Hoffa sounded similar notes, but Hoffa was more direct about what would happen if the tax on workers’ health insurance survives the rest of the way. “This provision is really a massive tax increase on the middle class. It is naive to think that insurers won’t pass this tax directly on to workers,” he said.
“Any claim that it affects only ‘Cadillac’ plans and thus the wealthy is misleading. This tax will fall on one-third of Americans in 10 years. The average affected household will pay $7,600 more in taxes between 2013 and 2019, according to a recent analysis... We’re pleased the Senate is moving forward on health insurance reform we so desperately need, but not at the expense of middle-class wage earners,” Hoffa stated.
“Working families have some serious concerns and we need to be sure our lawmakers hear from us so they can be addressed,” the USW’s detailed statement said.
USW called the public option “essential” because “it will lower premiums for everybody and save money – over $100 billion according to an independent study. It will mean real competition to break the stranglehold of big insurance companies, and be a real guarantee that coverage will always be there, no matter what...Health care reform has to ease the cost burden on individuals and families, not worsen it.”
The public option itself is only second-best for USW, 20 other unions and more than 500 other labor organizations. They all prefer a totally government-run single-payer plan (HR 676), which the Senate Finance Committee defeated and House Speaker Nancy Pelosi, D-Calif., rejected.
The Senate plan must also get all employers to pay in, USW said, adding “health care can’t be paid for by a new tax on middle class benefits.” The Senate Finance Committee’s tax, which Reid used as a model, would hit workers with a 40% tax on their health insurance, starting in 2013, the union pointed out. “That’s not the change America voted for. A new tax on the middle class is unacceptable,” USW concluded.
AFT’S Weingarten said the tax would prompt even more health coverage cuts “to avoid this tax. Over time, this will shift increased healthcare costs to most of the 160 million nonunion and union workers and their families who depend on employer-provided coverage. Our healthcare system cannot be reformed by making it less affordable and less accessible for those who already have it.”
SEIU’s Stern was the exception. He praised Reid for unveiling the bill, and -- except for praising inclusion of the public option -- stayed away from specifics.
Reid’s bill “gets us one step closer to health care that works for the American people's bottom line, instead of insurance company profits. This bill keeps insurance companies from controlling our healthcare system by guaranteeing choice and accountability through a public health care option. This is the Senate's opportunity to stand up and say ‘Enough!’ No more scare tactics. No more kowtowing to conservative obstructionism. No more politics as usual. No more hesitation,” Stern said.
SEIU spokeswoman Lori Lodes told Press Associates that Stern’s statement “is less about the parts that we know” -- such as the tax and affordability -- “and more about moving the process forward. We will continue to work to improve the bill.”
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