Unions say Obama betrayed them on ACA

More news. There’s a battle brewing between the White House and several labor unions over implementation of the ACA, Obama’s Affordable Care Act (aka Obamacare).

The headline and lede — a number of unions are angry with the White House over what they call a “betrayal” of promises made to them in the 2008 presidential campaign by the man they strongly supported. That promise? It again goes back to this Obama quote:

“If you like your health-care coverage, you can keep it.”

While many unionized workers get their health insurance totally from employer-provided plans, a number do not. Consider the Laborers union, for example. These are the lowest paid workers on a unionized construction site — they’re not carpenters, millwrights, drivers, or any other specialty. They are the people who carry stuff, cut stuff up for scrap, operate elevators for the other workers.

These workers, like most other unionized construction workers, can’t get health insurance from their employers because they have many employers throughout the year (they hope). Therefore, their union provides them an insurance plan.

But according to the Washington Post, here’s what’s happening to those plans:

[The unions’] complaints reflect a broad sense of disappointment among many labor leaders, who say the Affordable Care Act has subjected union health plans to new taxes and mandates while not allowing them to share in the subsidies that have gone to private insurance companies competing on the newly created exchanges.

Feel free to read through the piece, but in short, the White House has decided to treat all union-provided plans (called “Taft-Hartley plans,” as explained in the article) as if they were employer plans. That subjects them to the taxes and mandates of other employer plans, plus adds some special taxes to them, and then excludes them from being eligible for subsidies via the exchanges. In effect, say the unions, it would destroy their plans. Thus the reference to Obama’s now famous “you can keep it” quote.

At present, two unions are complaining formally, the Laborers union from the example above and UNITE HERE, which covers culinary and hotel workers. Other unions are feeling the pinch, as well as some churches and corporations who also operate their own “self-funded” plans, which like the Taft-Hartleys are regulated at the national level, not state-regulated like commercial insurers, and face the same hurdles to being offered on the exchanges. But these two unions are the lead complainants.

What’s wrong with the way the White House is treating union-provided plans?

The gist of the criticisms are these. First, the ACA doesn’t take into account what makes these health plans different, and puts them at a competitive disadvantage relative to the individual plans offered by the big insurance companies. Washington Post again, my emphasis and paragraphing:

Union officials acknowledge that their plans are unique but say the health-care law didn’t take that into account. As a result, they say, commercial insurers can cover anyone through the individual or group markets, while their funds cannot. They add that the law provides incentives for employers to drop coverage and shift their employees to the exchanges.

The legislation also imposes a $63-a-person annual tax on nonprofit, self-funded plans, including unions’ plans, and uses that money to subsidize insurance companies that take on costly patients. The union plans do not get any of that subsidy money, a source of union outrage.

Labor leaders also complain the law hurts in other ways. In the Las Vegas area alone, the Unite Here health fund has absorbed about 13,577 new young-adult dependents at an annual cost of $16.3 million because of the rule allowing young adults to stay on their parents’ health plan until the age of 26, union leaders said. Unions also complain that their plans are not allowed to compete with for-profit insurance companies on the new exchanges, where they might offer lower-cost options.

That’s quite a set of penalties and competitive disadvantages. The unions (and others who offer such plans) say this will destroy their plans and want those rules reversed. The White House refuses.

And then there’s the sense of betrayal. These unions, including UNITE HERE, one of the first to endorse Obama in 2008, say they were told repeatedly that if there were problems with the law, it would be fixed:

TVA construction worker, 1942

TVA construction worker, 1942

Leaders of two major unions, including the first to endorse Obama in 2008, said they have been betrayed by an administration that wooed their support for the 2009 legislation with promises to later address the peculiar needs of union-negotiated insurance plans that cover millions of workers. …

[Donald] Taylor [UNITE HERE president] said Unite Here officials have met with White House officials 48 times. At the time the health-care bill was being considered, he said, “we were told that ‘if there were problems, don’t worry, we’ll get them fixed.’ ”

The White House says that giving in to the unions would allow their members to “double-dip” — get two benefits where others get just one. Read the piece to sort that out. Also, read the piece to see how other unions and the AFL-CIO are staying mute on this, despite strong labor support for Obama is 2008 and 2012, and assurances to them that their issues — including the now-forgotten Employee Free Choice Act — would get top priority by the new administration.

“Now-forgotten” by whom? By the unions themselves, it seems. Apparently, if you’re a union, you’re only Cinderella when the lights are bright and someone wants something from you.

Why is the ACA such a tangled mess?

To help make sense of this story, you need to consider the ACA in general and from the top. Simply put, the ACA is a tangled mess that does some good. We covered why it was a tangled mess here. That piece quotes at length from Ari Berman, who has the details:

The inside strategy pursued by [White House aide Jim] Messina, relying on industry lobbyists and senior legislators to advance the bill, was directly counter to the promise of the 2008 Obama campaign, which talked endlessly about mobilizing grassroots support to bring fundamental change to Washington.

But that wasn’t Messina’s style—instead, he spearheaded the administration’s deals with doctors, hospitals and drug companies, particularly the Pharmaceutical Research and Manufacturers of America (PhRMA), one of the most egregious aspects of the bill. “They cared more about their relationship with the healthcare industry than anyone else,” says one former HCAN staffer. “It was shocking to see. To me, that was the scariest part of it, because this White House had ridden in on a white horse and said, ‘We’re not going to do this anymore.’

When they were negotiating special deals with industry, [former Baucus aide] Messina and Baucus [current] chief of staff Jon Selib were also pushing major healthcare companies and trade associations to pour millions of dollars into TV ads defending the bill. …

I added this summary:

So why is the ACA is so complicated? Because the only customers that Obama, Messina and Max Baucus listened to during the entire process were “doctors, hospitals and drug companies, particularly the Pharmaceutical Research and Manufacturers of America (PhRMA),” not to mention the for-profit health insurance industry itself. Not progressives, including House progressives, and not the grassroots base. Just the industries.

A public program that serves mainly private interests has to be complicated, if it wants to appear to be a public program. Once you decide on a Clintonian privatized plan, the only way to obscure your goal is complication. Otherwise, it’s just private insurance.

That tangle necessarily results from what the plan appears designed to accomplish:

▪ Occupy space originally planned for Medicare
▪ Preserve employer-based health insurance as the way most Americans are covered
▪ Preserve the role of the billion-dollar health insurance companies as the only entities providing health insurance to working-age people and their children

I’ll leave you to sort what to think about all this. But union anger is news. Will it evolve into something more? We’ll have to see. After all, we’ve heard that song before. Maybe the unions could take a lesson from the oft-betrayed gay movement, something about standing up for yourself and fighting back … or something.


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

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