The powerful Teamsters union on Thursday broke with President Obama over Senate Democrat’s health care bill that would slap an excise tax on insurance companies for so-called “Cadillac” health plans, the high-priced and benefit-rich coverage that unions have fought hard to win for their members.
International Brotherhood of Teamsters President Jim Hoffa said the Senate bill would levy “a huge middle-class tax hike” for union workers after insurers pass on the added expense.
Labor has been a key ally of the Obama administration on health care and other issues, making the defection of the Teamsters a blaring warning signal for Senate Democrats. The House-passed version of the bill does not contain the benefits tax.
Mr. Hoffa stressed that the Teamsters are pleased to see the Senate moving forward on health insurance reform, “but not at the expense of middle class wage-earners.”
“Any claim that it affects only Cadillac plans and thus the wealthy is misleading,” Mr. Hoffa said. “This tax will fall on one-third of Americans in 10 years. … The idea that this tax will curtail rising premiums is just dead wrong.”
He cited recent analysis of Senate Democrats’ plan that showed the average household with high-end health coverage will pay $7,600 more in taxes between 2013 and 2019.
“Many plans are expensive because they cover workers in dangerous occupations, because they are in regions where insurers have near-monopoly power, or because they cover a group thats older than the general population,” Mr. Hoffa said.
Other unions took more offered more muted criticism of the Senate bill crafted by Majority Leader Harry Reid, Nevada Democrat.
The American Federation of State, County and Municipal Employees applauded Senate Democratic leaders for taking a step toward the goal of universal health care but urged them to “improve the bill.”
AFSCME Presient Gerald W. McEntee said his union “continues to support health care reform that includes a robust public option, an effective employer mandate, and no taxes on middle-class health plans.”
Sen. Bernard Sanders, a Vermont independent who votes with the Democrats and has been a staunch union supporter, said he shares the Teamsters’ concern about the excise tax. But he said it would not stop him from backing the bill in a key procedural vote Saturday evening, which will be the first test of Mr. Reid’s ability to secure the 60 votes needed to push the bill through the Senate.
Another pro-union Democrat, Sen. Sherrod Brown of Ohio, disagreed with the union argument that the excise tax would be passed on to union workers, but predicted the bill would be improved by the end of the process.
“This bill is not perfect yet. Im open to amendments on the floor,” he said. “I like the bill generally the way it is. There are some things I could quarrel about, but its certainly a good bill.
He said he planned to support the bill in the procedural vote Saturday that will bring the legislation to the Senate floor for debate.