video: Lisa Blais: Big Labor Wants To Shuffle The Deck On Obamacare

Thursday, September 26, 2013


View Larger +

AFL-CIO and its members have a bone to pick with the Affordable Care Act (ACA), also known as Obamacare.

While the beat goes on across Rhode Island to trumpet information about HealthSourceRI, the health insurance exchange created as a result of Governor Chafee’s Executive Order in response to the Affordable Care Act (ACA), the AFL-CIO has been pleading with the Obama Administration to waive some requirements of the ACA, otherwise known as Obamacare, for members of their multi-employer health and welfare plans.

No collateral damage. Okay for thee but not for me.

During the AFL-CIO’s recent national convention, union leadership railed against the “unintended consequences” of the ACA and passed Resolution #54. That resolution essentially demanded that the Obama Administration approve special treatment for the unions as well as their members.

Labor wanted the Obama Administration to waive the tax on their Cadillac plans. Cadillac plans are taxed under the rules of Obamacare and references the richest of health insurance benefits offered to many union members—some in the private sector—many in the public sector. Of course, if the unions need to pay the tax on those plans then their costs rise and they become unaffordable. A surprise, indeed. Richard Trumka, President of the AFL-CIO, sought a waiver not only for that tax but also for permission to receive the taxpayer subsidized premium subsidy for their rank and file members covered under multi-employer plans. Hence, Resolution #54.

Terry O’Sullivan, president of the Laborers International Union of North America (LIUNA) speaking out against Obamacare during the national convention said (in part): “If the ACA is not fixed and it destroys the health and welfare funds that we fought for then I believe it (ACA) should be repealed.” But wait, he doesn’t really want it repealed he just wants it “fixed’. Watch the clip and listen to his passionate plea that those rank and file members “can’t be collateral damage” in the “healthcare fight in this country.” Huh. If there is to be no collateral damage for them but will be for employees of single payer plans and a host of others then how will the scheme be sustained?



Was a deal struck?

The short answer is “no”. In a letter from the Treasury the request was denied. The explanation is both explanatory and telling. It is explanatory because most folks don’t usually think about the fact that our benevolent Treasury does not consider health insurance premium contributions made on behalf of employees by their single or multiple employers as taxable income. So, they denied the request for what was deemed essentially a request to “double-dip”. In other words, they denied the ability to continue to enjoy the tax free employer premium contribution while also enjoying a taxpayer subsidized premium subsidy.

The letter is telling. Take a closer look. It states that ”…the Administration will continue to address a variety of issues relating to the interpretation and implementation of the ACA, some of which will be the subject of future guidance.” It concludes that they want to work with stakeholders “who have ideas about how to preserve high quality existing coverage while new coverage is extended to those who do not have it—in all cases in accordance with the statutory terms of the ACA.”

Translation? They are still trying to figure it out. Some people who enjoy those Cadillac plans may no longer have them; some employees who essentially receive the minimum level of health insurance partially subsidized by employers cannot waive out for taxpayer subsidized premiums; they are looking for ideas for some employees to maintain their”high quality existing coverage” and as most Americans already know, the terms of Obamacare is not delivering on the coveted brass ring of affordable (value-based) care for everyone. After all, someone has to pay full freight and more for this scheme to be viable. Labor figured that out. They just didn’t want it to be them.

For the Administration’s part, President Obama urged Richard Trumka and other top labor leaders to encourage their membership to utilize the health insurance exchanges. This reportedly did not go over well. Given that union membership numbers have been on the decline, some labor leaders are concerned with holding onto their membership. Losing dues revenue, facing higher costs for their Cadillac Plans and promises made to retirees may all add up to a similar train wreck that RI taxpayers face when confronted with promises made to public sector retirees for their health insurance. Otherwise known as OPEB—Other Post Employment Benefits—RI’s unfunded liabilities are downright scary.

Public sector union retirees moving to RI’s insurance exchange?

Phil Marcelo of the Projo recently reported that Rosemary Booth Gallogly, RI’s State Department of Revenue Director floated the idea of rolling Rhode Island’s public sector municipal retirees into HealthSourceRI. Evidently, the Obama Administration agrees.

While she was clear that she didn’t know how this might work she suggested that it was worth studying given OPEB’s onerous unfunded liabilities of over $3 billion and climbing. On its face, the idea represents a way out for our cities; in pragmatic terms, ultimately a way out for taxpayers who are on the hook for those unaffordable and unsustainable “promises.” What becomes very clear is that while the insurance carriers simply reshuffle their deck by increasing deductibles, reducing benefits and increasing co-pays, the state is looking to shuffle the deck as well; just as labor tried to do with Resolution #54.

But, under Obamacare everyone is mandated to purchase insurance or pay a tax while others will receive taxpayer subsidized premium subsidies based upon income eligibility. “Everyone” is not pleased with this tax mandate. The answer to Booth Gallogly’s query will not come easily and those who can look for ways to reshuffle their deck to off-put rising costs will.

Shuffling our state budget, too? Yes.

The Finance Committee recently met to hear from the Executive Director of HealthSourceRI, Christine Ferguson. Chairman Helio Melo pressed her for the cost to run the insurance exchange given that the federal dollars are dwindling, they won’t be replenished and the Finance Committee must plug that expense into the state’s budget. This was not the first time that he posed the question. That cost has not been determined. Read the previous sentence again. Ms. Ferguson was not prepared to provide the Chairman with any numbers while knowing—or she at least should have known—that the Chairman would be anticipating the answer at that committee meeting. An educated “guess” would have been better than providing nothing especially given that the exchange is open for business on October 1. Her timing and the Finance Committee’s timing don’t jive. She won that round. That does not bode well for taxpayers. It does not bode well for the tortured budget process and it certainly underscores the two-step shuffle that many “stakeholders” have been doing since the ACA was blessed as the ”right to tax” Affordable Care Act.

Bottom line?

The pattern has clearly developed. In the quest to provide “affordable care for all” unions, employers, insurers and those with personal economic interests in the success of the exchanges will continue to shuffle the costs as best they can…unfortunately it looks like it will be at the expense of the taxpayers who always foot the bill.


View Larger +

Lisa Blais is a board member of OSTPA, a taxpayer advocacy organization in Rhode Island.


Enjoy this post? Share it with others.


Sign Up for the Daily Eblast

I want to follow on Twitter

I want to Like on Facebook


Stay Connected — Free
Daily Email