Labor leaders are fuming that President Obama has endorsed a tax on high-priced, employer-sponsored health insurance policies as a way to help cover the cost of health care reform. And as Senate and House leaders seek to negotiate a final health care bill, unions are pushing mightily to have that tax dropped from the legislation. Or at the very least, they want the price threshold raised so that the tax would affect fewer workers.
Labor leaders say the tax would hit not only wealthy executives with expensive health benefits, but also many rank-and-file union members who have often settled for lower wage increases in exchange for more generous health benefits.
The tax would affect individual insurance policies with annual premiums above $8,500 and family policies above $23,000, which by one union survey would affect one in four union members.
In recent days, labor's strategy has become clear. Unions are urging their members to flood their representatives with e-mail messages and phone calls in the hope that the House will stand fast and reject the tax. The A.F.L.-C.I.O., a federation of nine million union members, has declared next Wednesday "National Call-In Day" asking workers to call their lawmakers to urge them not to tax health benefits. The International Brotherhood of Teamsters is urging members to tell their representatives that "such a tax is simply a massive middle-class tax hike that this nation's working families should not be forced to endure."
Many Democrats fear that enacting the tax will hurt their re-election chances.
"This would really have a negative impact on the Democratic base," said Representative Joe Courtney, Democrat of Connecticut, who has enlisted 190 House Democrats to sign a letter opposing the tax. "As far as the message goes, it's a real toughie to defend."
While union leaders would prefer killing the tax, some say privately that they could live with it if the threshold is lifted to $27,000, say, or $30,000. They argue that many insurance policies above $23,000 are typical of the coverage in high-cost areas like New York or Boston, or policies that cover small businesses or employers with older workers.
According to a union survey, one in four members would be hit by a $23,000 threshold, but only one in 14 if the threshold were raised to $27,000.
White House officials, however, voice concern that raising the threshold that much would lose $50 billion of the $149 billion in revenue that the tax is expected to generate over 10 years.
Unions Rally to Oppose a Tax on Health Insurance
By STEVEN GREENHOUSE
Published: January 9, 2010
Labor leaders say President Obama is betraying unions by supporting a tax on high-priced, employer-sponsored health insurance.