Unions And Health Care

The labor movement has generally been a pretty strong voice for health care reform. That actually makes them an anomaly, because they and the workers they represent already receive, for the most part, quality health care through their collective bargaining contracts. The health care is often so good, in fact, that many unions gave up several wage hikes in order to get it. And now, with provisions in the Baucus bill to tax insurance companies for offering "Cadillac" care, we're starting to see the unions' self-interest come into play. Richard Trumka, the new head of the AFL-CIO, told Ben Smith that he would fight the insurance company tax:

AFL-CIO President Rich Trumka seconded a fellow labor leader who applied a barnyard epithet to the Senate Finance Committee's bill and with its proposal to tax some medical benefits.

"Gerry has much wisdom," Trumka said in an interview today, referring to AFSCME President Gerald McEntee, who attacked the bill last week. "We don’t think that the way to provide benefits for everybody is to tax people's benefits so they end up losing their benefits."

"We will fight pretty doggedly attempts to tax benefits because we’ve paid for those benefits over the years – we’ve forgone wage increases, pension increases, days off, and everything else to get those medical benefits," he said.

Trumka at least offered an alternative to pay for coverage subsidies and Medicaid expansion - a financial transaction tax. It's a very good idea to tax a minimal amount on every stock transaction - it's a pure tax on wealth, would hit those who make money from selling back and forth a hundred times a day, and would probably lead to limits on computerized flash trading, which should be illegal anyway. But it just makes no sense as a way to pay for health care. I also think Trumka is being a bit disingenuous by saying that taxing insurance companies on high-dollar plans would "tax benefits." It could just as well incentivize insurers to charge less on high-dollar plans. Trumka has a serious argument about the trade-offs of the union movement, but that should be accomplished through negotiation - companies relieved of an enormous health care burden may be happy with a payout.

The employer-based system is no friend to health care and should not be artificially preserved by a giant employer deduction. Baucus' bill offers a backhanded way to get at that deduction, but with nothing to rein that in, health inflation will probably cause every union to give back health benefits anyway. So at some point, we have to start moving America off of employer-based health insurance.

In another development, this Politico article quotes Anna Burger from SEIU saying that she could support a bill without a public option. SEIU and Burger have since refuted that, but that union has always taken a slightly more pragmatic approach. I'm generally tired of hearing "X says he/she could live with a bill without the public option!" stories, so I'll let that one lie. Soon enough people will have to pick a side, anyway.