Labor & Employment Law

Health Care Reform Tax Hits More Chevys Than Caddies

By Mike Hall

Working families, their unions and health care activists are continuing their battle to ensure that the final health care reform package being hammered out in negotiations between House and Senate leaders is real and meaningful reform. (Click here to find out more about the two bills and next week’s National Call-In Day for health care reform.)

The hot topic on the blogs and in the mainstream media is the fate of the tax on workers’ health benefits that is part of the Senate-passed bill.

Backers of the tax say it would impact only “Cadillac plans” but the Economic Policy Institute (EPI) calls that an “urban legend.” Says EPI economist Josh Bevins:

The excise tax proponents say their target is a Cadillac, but in reality they’re about as likely to hit a Chevy. The excise tax is not a progressive levy on lavish plans. Instead it’s a tax that will hit small businesses, older workers, and those most in need of health care the hardest.

In a conference call with reporters yesterday, Bevins, EPI President Larry Mishel and former Labor Secretary Robert Reich blew gaping holes in other arguments pro-tax advocates are spewing. Click here for more on the call from FireDogLake’s David Dayen,.

National Nurses United (NNU), the largest registered nurses union in the country, calls the tax scheme “unconscionable” and says working families “would have their health coverage taxed and seriously eroded,” if it is enacted. Read more here.

David Moberg at In These Times writes:

the excise tax on insurance?especially in contrast to surtax on the rich?proves to be just as bad as policy as it is politically. It’s intellectually bankrupt and widely despised.

Even as union members, health care groups and others are fighting to win real health care reform, on the other side, the private health insurance industry has not stopped trying to kill any meaningful reform. Seth Freedland at Inside Health Reform (subscription required) reports:

An in-house message sent by UnitedHealthcare to its employees used language that a consumer watchdog group calls “highly coercive” by urging workers to participate in a Web presentation by the insurer’s chief lobbyist as the company fights against major tenants of the health reform legislation moving in Congress.

Demanding that workers attend a meeting on company time that appears to be part of a larger imitative against some provisions of the health care system reform is nevertheless “political harassment,” Judy Dugan, research director for Consumer Watchdog, told Inside Health Policy.

Read Freeland’s report at Consumer Watchdog.

Full post as published by AFL-CIO NOW BLOG on January 07, 2010 (boomark / email).