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The Unions vs. Obamacare

Disenchantment sets in.

Mar 25, 2013, Vol. 18, No. 27 • By MARK HEMINGWAY
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In Massachusetts, which has the highest average health care costs of any state thanks to the Bay State’s own misguided experiment expanding health care coverage, over half the state’s employees will be subject to the tax, according to a report by the Pioneer Institute. The report goes on to highlight that the tax is particularly punishing for middle-income public employees in Massachusetts. From 2018 to 2028, a police officer on a typical family plan will be subject to an extra $53,907 in new taxes. A teacher on an individual plan will owe an extra $20,807. Even granting that the problem is acute in Massachusetts, it’s safe to assume the Cadillac tax is going to cause turmoil across the country between public employees who have become accustomed to gold-plated health packages and taxpayers who are increasingly unable to pay for them.

Obama-care presents some additional challenges for those union members who aren’t public employees. Many employers of low-wage workers have expressed concern that they may have to drop existing health coverage, as Obama-care has outlawed the salient features of many cheaper insurance options. Offending plans had benefit caps and other drawbacks but were often the only affordable option for low-wage workers.

Owners of chain restaurants were particularly vocal about this problem, and in some cases subject to public opprobrium from Obama supporters for expressing concern that they might have to cut jobs or drop insurance as a result of the law. Now unions are expressing the same fears for the same reasons. Yet again, unions want a special dispensation for their own low-wage workers. The AFL-CIO, Teamsters, Unite Here Health, and other powerful unions are lobbying to let low-wage union workers remain on their existing insurance plans, while also collecting an Obama-care subsidy that is supposed to go only to low-wage workers without employer coverage.

The Obama administration hasn’t ruled the idea out. “These matters are the subject of pending regulations,” a Treasury spokesman told the Wall Street Journal. Aside from the question of cost, it would seem difficult for the administration to justify allowing only union workers to collect a subsidy on top of an existing insurance plan. If union workers lost their employer insurance coverage, they could take comfort in the fact Obama-care has a surprisingly expansive definition of who’s poor enough to qualify for government assistance to pay for health care. A family of four making up to $92,200 a year would qualify for a subsidy, and the subsidies are proportionally larger for those with lower incomes.

Beyond the specifics, what union leaders are really saying is that they have no confidence Obama-care will live up to its central promise​—​that the government can provide millions of uninsured Americans with health care coverage that both is affordable and meets their needs.

Surely organized labor must realize that Obama-care has only begun to be implemented. If the Democrats’ most ardent constituency and most prolific fundraisers are already having second thoughts about Obama-care​—​fearful that besides being expensive and unworkable, the law will make unions less attractive to workers and undermine collective bargaining​—​the law may be less secure than its apologists assume.

Mark Hemingway is a senior writer at The Weekly Standard.

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