Team Obama is considering a plan to offer health insurance subsidies – which were originally intended for the uninsured – to labor union members who already have employer-sponsored healthcare plans.
Disillusioned union leaders have been increasingly vocal about their objections to certain provisions of ObamaCare, which they say will “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class,” three labor leaders wrote in July.
Most recently, the AFL-CIO passed a stinging resolution criticizing Team Obama for virtually ignoring its concerns about the healthcare plan, saying: “You made the problem; you fix it.”
It should come as no surprise then, to anyone who knows anything about Barack Obama’s relationship with Big Labor, that the administration is considering a plan to do just that: Fix it.
As reported by Forbes, the unions are concerned with ObamaCare’s impact on multi-employer health plans, also known as Taft-Hartley plans. Taft-Hartley plans consist of health insurance plans which are arranged by labor unions and sponsored by more than one employer within a particular industry, such as restaurants; multiple employers subsidize health premiums of individual union members.
Approximately 20 million workers in the United States are covered under Taft-Hartley plans.
Workers with employer-sponsored coverage don’t qualify for subsidized coverage on ObamaCare insurance exchanges, which were designed for low-income people who aren’t offered coverage from their employers, and must therefore pay for health insurance on their own.
But labor union leaders want those subsidies to also apply to their members with employer-sponsored coverage, even though they already get those benefits tax-free due to the employer tax exclusion for health insurance.
So, what’s a president beholden to Richard Trumka’s AFL-CIO, the Teamsters and other labor unions do? According to Rachana Dixit of InsideHealthPolicy, the administration is “working on regulations to address the issue” that people covered under Taft-Hartley plans aren’t eligible for subsidies. [Translation: Union leaders are demanding special treatment and additional taxpayer subsidies that other participants in employer-sponsored coverage don’t get, and Barack Obama is considering giving them to them.]
However, Healthcare expert Avik Roy explained to Forbes that there is no “issue” – the text of ObamaCare is very clear: coverage through an employer-sponsored health plan disqualifies subsidized coverage eligibility in a state exchange, “because you already get a subsidy through the tax code,” i.e., enrollees do not pay income or payroll taxes on the value of their health insurance coverage.
Roy also put into perspective the union demand and Team Obama’s subsequent agreement to consider granting it:
“If suddenly, the 20 million people on Taft-Hartley plans were eligible for subsidies, ObamaCare’s costs would skyrocket. If half of those Taft-Hartley enrollees gained $5,000 per year in tax credits along with their tax-free health benefits, we’re talking $50 billion a year in additional insurance subsidies for those individuals. That’s more than half a trillion dollars over ten years, accounting for health inflation.”
So, will Obama cave in? Hard to say – given the pitched battle sure to ensue in Congress were such legislation to be presented. Then again, what a perfect opportunity for Obama, Pelosi, Reid & Co. to once again
lie argue that evil Republicans don’t give a damn about the working people of America.