Obamacare’s GOP gift

Oct 1 2013 - 9:33am

Say what you want about Republicans' obsession with destroying Obamacare. One thing they can't be accused of is acting in calculated, partisan self-interest.

If all the GOP cared about was hurting Democrats, Republicans might support the health-care law -- because it threatens a core Democratic Party constituency: organized labor.

Collective bargaining in this country developed under a system of employer-based health insurance, which government encouraged via generous tax breaks. In European nations with state-run universal coverage, unions focus on pay and working conditions. Here, they have the added function of negotiating for health benefits.

By now, that's much, if not most, of what unions do in return for members' dues.

Obamacare undermines this function and, therefore, labor's already diminished power to attract and maintain members, whose dues fill the campaign treasuries upon which many Democratic politicians depend.

The law does this in several ways. The first is the 40 percent excise tax on "Cadillac" health plans -- employer-provided insurance costing more than $10,200 for individuals and $27,500 for families. This cost-control measure, widely hailed by health-care economists, takes effect in 2018 and will hit many union plans. Over time, it will create a de facto cap on the benefits for which unions can bargain.

Obamacare's individual health-care exchanges also disfavor unions. When organizers try to recruit members today, health care is often a big selling point. What will organizers tell workers who, thanks to Obamacare, already have access to subsidized health care?

Then there are the "Taft-Hartley" plans, which serve unions whose members work for various companies over their careers, rather than for one firm. These plans, common in the hospitality and construction industries, gather contributions from employers and buy insurance for 6.2 million active participants, according to the Labor Department.

Obamacare menaces these affordable, portable plans by providing both workers and employers an affordable, portable alternative -- the exchanges -- that requires no union middleman and is partly subsidized by the tax on union plans. Suddenly, nonunion employers have a new competitive advantage.

Laborers' International Union President Terry O'Sullivan is so upset that he has threatened to support repeal of Obamacare unless the administration gives tax subsidies to Taft-Hartley plans, like it does for individuals on the exchanges. Alas for O'Sullivan, there appears to be no legal way to do so.

A natural question: If Obamacare has so many provisions bad for unions, why did most of them support passage?

It's a bit of a mystery. The answer seems to be that Obamacare was a progressive goal, unions are progressive, ergo unions were for Obamacare.

They did negotiate changes, such as a lower "Cadillac tax" with a later start date. Perhaps labor thought it could go back to Congress after the bill passed for relief on the tax and other issues, such as Taft-Hartley plans. If so, that became impossible after the GOP took back the House by campaigning against Obamacare.

Labor was blindsided this summer by President Obama's decision to delay the employer mandate by a year, to 2015. Having the employer and individual mandates start simultaneously was crucial to labor's support for the bill, as it kept the employer-based system -- from which unions benefit -- on an equal footing with Obamacare's new individual-based market.

Now, however, there's only an individual mandate until 2015. Employers are under no mandate to provide health care, and some may abandon their coverage, knowing that their workers must go to the exchanges.

Again, a worker insured by the exchange is one who doesn't need a union to get insurance.

In truth, there was always tension between the interests of organized labor and the goal of universal health coverage, regardless of employment status.

A 2009 AFL-CIO resolution backed government-run single-payer health care -- as long as it did "not diminish the hard-fought benefits currently enjoyed by our members" and permitted unions "to collectively bargain supplemental coverage." Translation: Unions want health care for all, plus more for them.

In reaction to the unions' clash with Obamacare, Republicans offer little but rhetoric, the gist of which is "we told you so," and continue demanding total repeal, as if the unions' objections were additional valid reasons to oppose the law.

What they seem not to grasp is that the features of the law that the unions hate are those that many Americans, including many who do not currently vote Republican, might like: the end of health insurance "job lock," say, or bending the cost curve through limits on Cadillac plans.

If Republicans were smart, they might support those aspects of the law, instead of total repeal. But, as we have seen in recent days, that is a very big "if."

Charles Lane is a member of The Washington Post's editorial board.

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