Unions chafing at Obamacare provisions

Labor leaders say deals were cut with insurance, drug industries while they were frozen out

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In this weekly column, former health insurance executive Wendell Potter offers commentary on matters relating to U.S. health care reform 

President Obama’s meeting Friday with labor leaders likely wasn’t a get-together he wanted. And it wouldn’t have been necessary if his administration and Congressional Democrats had given unionized workers the same consideration they gave business leaders and insurance company executives when the Affordable Care Act was being drafted.

As full implementation of the law draws closer, it is becoming clear that Democrats spent more time addressing the concerns of the business community, especially the insurance and pharmaceutical industries, than their friends and reliable allies in the labor world.

Friday’s meeting at the White House wouldn’t have been necessary if the administration and Congressional staffers who wrote the law had thought through how some of the provisions designed to mollify business interests would impact rank-and-file union members who were among the most fervent champions of health care reform.

The assumption seems to have been that labor would eventually fall in line with the final version of the reform legislation simply because it was ostensibly written by Democrats. Yes, labor leaders made frequent visits to the White House and Capitol Hill during the reform debate, but the folks who really had the Democrats’ ear were lobbyists for doctors and hospitals, drug makers and, of course, insurance companies.

Perhaps that shouldn’t have surprised us, given the political realities. The Clinton reform plan died because those special interest groups joined forces to nuke it in retaliation for not being invited to the table as the legislation was being created. Obama’s team took the opposite approach and cut deals with special interests from the beginning, believing  that was the only way any reform bill would get through Congress.

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Among the most frequent visitors to the White House during the early months of the Obama administration were corporate executives like former Aetna CEO Ron Williams and the chief lobbyists of the American Hospital Association and the Pharmaceutical Research and Manufacturing Association. As a consequence, to the dismay of patient and consumer advocates, the final bill did not include either a government-operated insurance plan (the “public option”) or price controls of any nature on drug makers.

Many of the president’s most ardent supporters — including those in the labor movement — felt ignored from the very beginning because Obama, who before becoming president had expressed support for a single-payer system, didn’t even insist that single-payer legislation be seriously considered on Capitol Hill.  

Most labor leaders continue to support the Affordable Care Act. But they’re frustrated that the administration has delayed for a year provisions of the law causing heartburn for insurers and employers while being unwilling to deal with some of law’s unintended consequences that might cause union members to pay more for health insurance.

One of unions’ problems: the tax on so-called Cadillac plans. Many union workers are in health plans with solid benefits and relatively low copayments and coinsurance obligations. Democrats drafting the law bought the insurance-industry’s argument that Americans need to have more “skin in the game,” meaning they should pay more for care out of their own pockets even if they’re insured.

I’ve talked to union members who have not had a raise in years because of rising health care costs. They’ve been willing to forego wage increases at the bargaining table in exchange for keeping decent health insurance.

Obamacare provides employers with a disincentive to continue to offer health plans that exceed a certain value. Such plans will be subject to a premium tax.

Another unintended consequence of the law will mean that many other union workers — especially those in the building trades — will have to pay more for coverage than they do now. Many plumbers and carpenters who work for multiple employers during a given year, for example, are covered under what are referred to as Taft-Hartley plans. These plans ensure continuity of coverage for workers and their families during weeks and months they are between jobs.

Unless the Affordable Care Act can be changed, however, those plans will become increasingly expensive to employers. Union leaders fear that unless federal tax credits are offered to employers and workers covered under such plans, workers will see hefty premium increases.

Several state and local trade unionists sent a letter last month to AFL-CIO leaders urging them to work with the White House to protect their interests. “We would not be in this boat,” they wrote, “if the crafters of the ACA had looked to the labor movement for guidance rather than relying on insurance industry lobbyists whose business model relies on a failing employment-based system and whose profits depend on shifting costs onto the backs of workers while reducing choice and quality of care.”

What is most noteworthy about the letter, however, is that it calls on the AFL-CIO to endorse national single-payer legislation as the next step in reforming the U.S. health care system. While it’s doubtful Obama will renew his support of a single-payer system, union leaders and the rank and file may be signaling that they will be pushing for that sooner rather than later.