Tuesday, 12 January 2010
Why Labor Unions are Clamoring over Health Reform
Labor unions have been strong supporters of the Democratic Party in the past, but that could change in the upcoming elections due to one provision in the current health reform bills.
Labor unions are appalled at the thought of a “Cadillac Tax” on high-value health insurance policies which will likely hit many labor-sponsored individual health insurance plans. This tax would also hurt union members who have negotiated lower wages for better health insurance polices through their employer-based coverage.
Union leaders met with President Obama on Monday to discuss making changes to the current legislation to lower the number of union members who would be included in this new tax. According to the labor unions, if the Senate bill is passed as it is, it will affect 1 in 4 members.
The tax in question would levy a 40 percent charge on health plans costing more than $8,500 per year for individuals and $23,000 for families. Alternatively, the House proposed a plan on taxing individuals who make over $500,000 a year and $1 million for couples.
Unions predict that the Senate tax will hit the middle and working-class families the hardest and therefore prefer the House tax plan.
As a way to put pressure on Democrats and President Obama, union leaders have vowed to vote in the upcoming elections, which would take way votes and funding for Democratic candidates.
In addition to labor union opposition, federal and postal employees recently sent a letter to congressional leaders expressing their discontent with the Senate-tax plan. The letter, signed by nine million members, writes in concern that the tax will hit Federal Employees Health Benefits Program enrollees and make federal and postal employment less attractive.
The accumulating coalition against the Senate tax plan will make it difficult to pass and makes the House tax plan look more attractive among Democrats.
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