Labor Unions Finally Read Obamacare Fine Print, Realize Costs Set To Spike, "Turn Sour" On Obama

Tyler Durden's picture

It is a well-known fact that nobody in Congress ever reads, or even skims, any law, and especially not the fine print, it passes until long after it has been enacted into law. It appears the same is just as true for the biggest pillar of support for the Obama administration: America's labor unions, whose liberal vote every election is instrumental to preserving the outflow side of America's welfare state. As it turns out, it was the same labor unions who enthusiastically supported the primary accomplishment of the Obama administration in the past 4 years, Obamacare, only to realize, long after it has become reality that, surprise, their healthcare plan costs are about to go up. And, as the WSJ colorfully summarizes, they are now "turning sour."

From WSJ:

Union leaders say many of the law's requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents' plans until they turn 26.

So what are the Unions' demands to offset what they only now realize will push their overall costs higher? What else: Moar!

To offset that, the nation's largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.


Top officers at the International Brotherhood of Teamsters, the AFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage.

But, but, they can't - that's the whole point, or didn't they read that part too? Doesn't matter - to them it is now unfair, nay "unacceptable":

"We are going back to the administration to say that this is not acceptable," said Ken Hall, general secretary-treasurer for the Teamsters, which has 1.6 million members and dependents in health-care plans. Other unions involved in the push include the United Food and Commercial Workers International Union and Unite Here, which represents service and other workers.

So now that even the unions have understood that Obamacare is one big tax, maybe it is time to reevaluate its arrival at a time when the already strapped US consumer sees taxes rising, and has their savings extinguished.

Employers and consumers across the country will see big changes under the health law, which goes into full effect next year. Insurers will no longer be able to deny coverage to people with pre-existing conditions. Most individuals will be taxed if they don't carry insurance, and employers with at least 50 workers will face a fine if they don't provide it. About 30 million Americans are expected to gain insurance under the law.


John Wilhelm, chairman of Unite Here Health, the insurance plan for 260,000 union workers at places including hotels, casinos and airports, recalls standing next to Barack Obama at a rally in Nevada when he was a 2008 presidential candidate.


"I heard him say, 'If you like your health plan, you can keep it,' " Mr. Wilhelm recalled. Mr. Wilhelm said he expects the administration will craft a solution so that employer health-care plans won't be hurt. "If I'm wrong, and the president does not intend to keep his word, I would have severe second thoughts about the law."

Wait, no, you mean that in order to get your vote a career politician... lied? Say it isn't true.

So what is an administration that has pandered to every demand for welfare increases ever, to do?

For the Obama administration, holding firm against union demands for subsidies risks alienating a key ally. Giving unions a break, however, would not only increase the cost of the law but likely open the door to nonunion employers in a similar situation who would demand the same perk.


Obama administration officials declined to answer questions about whether union-employer plans could qualify for subsidies under the law. A spokesman for the Treasury Department, which will administer the subsidies as tax credits, said: "These matters are the subject of pending regulations. We will continue to work with employers, workers, consumers and businesses to implement the health-care law."


Under the health law, households earning up to 400% of the poverty level—$92,200 for a family of four last year—will be eligible for tax credits to offset the cost of private insurance. The less a household earns the more generous the subsidy.

And while the political wranging is about to get heated, Unions suddenly find themselves facing a very existential problem:

The Sheet Metal Workers International Association helped push for passage of the health law. Mr. Beall said he still believes everyone should have health insurance, but worries the law is undermining the union's ability to offer coverage.


"If we're not offering our members insurance and pension, why would you want to be union?" he asked.


The International Union of Operating Engineers Local 150 of Countryside, Ill., which represents construction workers and insures about 65,000 people, is also examining whether some lower-earning workers would eventually be better off leaving the union-sponsored plan and instead getting federally subsidized insurance.


"I've told my members, as this evolves, your health care will not look like it does today," said James Sweeney, president and business manager of the local. "I have to cut it back."

What is most disturbing is that even the unions are starting to understand that there is really no such thing as a free lunch:

Central Blacktop Co., a Hodgkins, Ill., road builder that employs members of operating engineers Local 150, provides health benefits by paying $13.45 per hour that each member works, said Joseph Benson, the company's chief financial officer. That averages nearly $19,000 a year per worker.


"Ultimately any increase in expense to the fund is going to come from us down the line," he said.

It will, but not today. Today, the agenda is to just get more.

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Say What Again's picture

So they're having an "Oh Shit!" moment

trav777's picture

these freakin

hedgeless_horseman's picture



Bait and switch.

Obamacare is of, by, and for the healthcare insurers.  It is designed to remove competition and assure profits for healthcare insurers, exactly as the Federal Reserve Act does for the big banks.

HIPAA was not about privacy for the patient.  It is soley to guarantee healthcare insurers access to preexisting conditions.

None of this will change until bribery campaign contributions are reformed.

EnslavethechildrenforBen's picture

America's a welfare state for the rich criminals, not slaves laboring for the union. However it is sad that the unions are run by incredibly stupid individuals that see Obama as being less than the pure evil bastard that he really is.

Atlas_shrugging's picture

This is nothing that a trillion dollar coin can't fix

The Juggernaut's picture

This is what happens, you stupid fucking communists.  You need to pay communism with capitalism... the fruits of your labor go to other people, you fucking idiots.

Crazed Weevil's picture

Aren't 'Useful Idiots' so....useful

Lost My Shorts's picture

Whenever you get hundreds of players and interest groups together on a massive project like Obamacare, there are bound to be different agendas.  But probably the hidden agenda of key policy wonks deep in the process was to blow up the system and force a single-payer alternative like every other rich country has.  So when you look at irrational aspects of Obamacare, keep in mind that it was designed to fail.  It was designed to be a sort of bomb driven into the middle of the current (very expensive and idiotic) system.

You gotta give them credit -- the politics are too complex to get from here to there any other way.  The bomb in the birthday cake approach was the only possible one.

hedgeless_horseman's picture



So when you look at irrational aspects of Obamacare, keep in mind that it was designed to fail.

Really, what irrational aspects, exactly?  If you are the health insurers, Obamacare is a thing of beauty and rational perfection. 

Read The Creature from Jekyll Island, and everytime it says big bank think big healthcare insurer; everytime is says Federal Reserve Act think Patient Protection and Affordable Care Act (Obamacare).

Stackers's picture

"We have to pass the law so you can find out whats in it"

~Old Hag

FEDbuster's picture

"We have to vote for this guy to see how he is going to fuck us in the ass"  Richard Trumka, President of the AFL-CIO

redpill's picture

"If I'm wrong, and the president does not intend to keep his word, I would have severe second thoughts about the law."

As if it matters if you support it now or not.  Besides they know you have nowhere else to go.  They are the wagon you've decided to hook up to, enjoy the ride, fuckers.

Midas's picture

"Larry, this is what happens when you fuck a stranger in the ass!"


--Walter Sobchak.

Payable on Death's picture

Certainly no one believes that Obamacare will reduce health care costs. What some believe is that THEIR cost of health care could be reduced by someone else paying for it.

tbone654's picture

[shouted repeatedly while smashing a car with a crow bar]
Walter Sobchak: This is what happens when you fuck a stranger in the ass!

Rentier's picture

this line is almost funny,  "For the Obama administration, holding firm against union demands for subsidies risks alienating a key ally."


WTF does Obama care if he alienates them or not?!  Not like he can get re-elected again anyway.  Screw them and get the insurance lobby's money on the back end.

swmnguy's picture

One "irrational aspect" that comes to mind is the fact that nobody will be able to afford coverage. 

Most employees have no idea how much health insurance or health care itself actually cost.  They know how much they themselves pay, but have no idea that their employer is paying an equivalent of a quarter to a half again of their entire salary for health insurance.  Hgh-Deductible/Low-Premium plans are ridiculous, too.  I've got a $10,000 deductible Individual Policy for myself and two adolescent kids, and that costs nearly $500/mo. in premiums.  Of course, when my daughter went in for her 7th grade Volleyball sports physical, and got a couple of regular vaccine booster shots, the raw bill was $980.00.  Because Minnesota forces coverage of "preventive" medical, my payment was $180.00.  Where did the other $800.00 go?  I'm nowhere near hitting our deductible.

In other words, the finance of the whole thing has become as irrational as anything else in our financial funhouse.

I can afford our payments, and to keep the deductible's-worth in an HSA.  Most people can't.  Most small businesses will find it far cheaper to pay a $2000.00 penalty and end their provision of health insurance as a benefit, than pay some $18,000 a year in family coverage for an employee; unless they get their employees to cover $16,000 of that cost?  Who making the median of around $35,000 gross can afford that?

So I tend to agree that, while the insurance companies and health care corporations wrote this monstrosity, they never gave a thought to what it would look like when they got what they wished for.  It's a "poisoned chalice," in the odious cliche.  They get to have their bubble alright, but the crash is written right into it.  Then we have no choice but either write off another massive pile of unpayable debt, or to socialize it.  I'm guessing the next Republican President opens Medicare to everyone, as a "Job-Saving" measure, and every corporation not in the insurance or health care business is ecstatic, and it's the most popular political move of the past 50 years.  It has to be a Republican who does it, because a Democrat would be called a Commie for doing it.  Just as Clinton could do to welfare what Reagan could not, and Obama can do to the Bill of Rights what GWB could not, etc.  It's nothing to do with the "core values" of the politicians as they're all the same; it has to do with the brand image.  Democrats are Socialists who hate the rich, so they can do whatever the FIRE sector wants with impunity.  Republicans are crypto-fascists who only care about their 1% pals, so they can actually give away money to keep the masses pacified.  It's all brand marketing.

Since Americans don't seem to understand the difference between Health Insurance and actual health care, and they have no idea how much either one costs, we get this.  A olly-olly-ox-in-free period for the insurance companies to loot the economy until it collapses and we finally go to single-payer after money is already gone. 

Just my prediction.

JayKitsap's picture

I think Ocare requires the company to insure the worker, but not the family.  Wait until that surprise hits when the employer reduces everyone to individual unless the worker wants to pony in $5K.

This year W-2's show the cost of employer paid heathcare.

swmnguy's picture

"This year W-2's show the cost of employer paid heathcare."

Well, it's about damned time.  I haven't gotten a W-2 in years, but it always infuriated me how uncurious most employees are about that.  The collapse of this monstrosity has been a long time in the making.  It's amazed me how far down the road this shambles has made it.

PeaceLover's picture

I don't know the only guys that tells the truth get shitted on

Ron Paul and Ralph Nader

Pretty sure this whole deal is a give away to Insurance Companys

friction 10% 25% or more to handle our money. Stupid Bet
kind like a Bank what do they create, do the make anything?
Do they make new products?
Do they grow food?



If you have a big government and we do WAY TO BIG
The only thing they should be involved in is Single Payer Health Care.
Or at the least Medicare for all, and check the prices!

Not much chance



hedgeless_horseman's picture



 I've got a $10,000 deductible Individual Policy for myself and two adolescent kids, and that costs nearly $500/mo. in premiums.

I believe that deductibles will be capped at $2,000 starting 2014, and totally obviating the benefit of an HSA. 

As we all should understand, lower deductibles mean higher premiums.

Get ready to pay moar premium!

swmnguy's picture

Oh, that wouuldn't surprise me in the least.  Like everyone else, I'll be uck-fayed.

hedgeless_horseman's picture



If you are healthy, and unlikely to need healthcare services, you are indeed truly fucked.  No more escape by choosing high deductible HSAs. 

swmnguy's picture

I'm starting to nose around the private, cash-paid concierge doctors in my area.  I don't know enough to know if that's really a solution, but you described my and my familiy's situation pretty well.

hedgeless_horseman's picture



Forget the concierge marketing scheme, paying $1,000+ just for an annual check up (the highest level office visit for new patients is CPT 99215) is stupid; especially considering that the Medicare fee is less than $400. 

Almost all doctors will accept 80% or 90% of the CMS Medicare Fee Schedule if you pay cash, but you must ask in advance when you call. If they say no, then find someone that will.

swmnguy's picture

Thanks.  That makes a lot of sense.

In general; not just regarding health care; when it comes to getting the goods and services people need, getting it out of the arena of Finance and into the arena of individuals making deals they can live with between themselves seems to be the trend.

It's hard to see eras ending and beginning when it happens in your life in real time.  But it looks to me like the era of complex finance as it involve most people is the historical anomaly, and it's ending.  I think within my lifetime a lot of people will be doing a lot of bartering of goods and services, in their own locales.  Like most people did everywhere, until about a lifetime ago.  Complexity has metastasized and our official systems and ways of getting things done are getting out of the reach of most people.

MachoMan's picture

Even better, for cash paying clients, document retention and note taking are reduced to the minimum ethically allowed (as opposed to the standard required to bill X insurance)...  in short, there may not be a proper record of some condition you want to remain out of the public eye.

Parabox's picture

Deductibles will be limited to $2000/$4000 in 2014.  HSA limits do not peg to the deductible anymore, so the tax benefit of HSAs will still be there, up to the max annual COLA limits.

Clashfan's picture

They should've just opened Medicare to everyone to begin with, but the insurance companies wouldn't let them. I doubt they will in the future, either. You may be right (I hope). We'll see.

But the amount of uninsured people, who can't afford it, is hurting the country and costing the country in many ways.

Lost My Shorts's picture

It's designed to fail because it's going to be way way way too expensive.  I am sure everyone here agrees.  We already spend a crazy high amount of our GDP on health care, and this will make it even bigger.

To understand the Obamacare maneuver, you need to keep in mind a recurring legislative strategy used in the era of gridlock:  try to hoist the opposition by their own petard.  No Child Left Behind was a Republican attempt to hoist the left by its own petard in education.  It also was designed to fail.  You claim that every child will be up to snuff by time X -- that's a joke, it can't happen.  But the left can't say no to a phrase like "no child left behind" so there it was, designed to embarass the public schools and usher in privatization.  It only worked a little bit -- they underestimated the education establishment's ability to dodge and weave and move the bars and co-opt the thing in various ways.

In Obamacare -- Dems know the Repubs exist to promote corporate profits.  So they designed a plan that would load the insurers, drug companies, hospital chains etc. with profits.  The Republicans couldn't say no to that -- it's everything they believe in.  Then the system proves wildly too expensive and boom, it collapses, and no way to pick up the pices but single payer.  That was their idea, anyway.


swmnguy's picture

Hey, get out of my brain!



hedgeless_horseman's picture




We already spend a crazy high amount of our GDP on health care, and this will make it even bigger.

If by "we" you mean Medicare [US Taxpayers] paying for every test and procedure under the sun on 65 year old voters to tell them they are not going to die, today, then I agree.  However, those actually paying for heathcare out of their own pocket, not Uncle Sam's, do not pay a crazy high amount relative to the rest of the world.

Lost My Shorts's picture

Well, umm...  I am an expat living mostly in Asia, and the French hospital where I go charges one-third what any American place would charge.  You can buy birth control pills without Rx for $4 per month, so no one is yelling about sluts with taxpayer-sponsored sex lives.  Vaccines cost $10 or so.  An EKG is about $20.  Once after some bad oysters I spent the night in a clinic with a gram of rocephin going into my arm, and the bill was $300.  Would have been $3,000 in the US.

Costs in the USA are crazy high even if you pay yourself.

Freddie's picture

Where can one go to get the f**k out of ObamaLand?   Asia? Thailand?  Eastern Europe? 

hedgeless_horseman's picture



Costs in the USA are crazy high even if you pay yourself.

This is absoutely false. 

If the American healthcare system has done anything good it is to have kept the reimbursement down for providers, i.e., the costs down for insurance companies. 

If there is one thing I know it is the true-relative pricing of international healthcare.

The problem in the USA is not the price of care; the problem is over consumption of an entitlement.

object_orient's picture

Huh? I'm uninsured and haven't been to a doctor in 15 years, so I'm not exactly over-consuming anything. If I go now and pay cash, the cost will still be high. WTF are you talking about?

hedgeless_horseman's picture



I'm uninsured and haven't been to a doctor in 15 years

That is exactly what I am talking about.

People that are insured, but do not pay for the entitlement, such as Medicare and Medicaid recipients, tend to over-utilize it, versus someone like you that pays for the care with their own money.

My parents are on Medicare, and have AARP secondary insurance to cover the 20% Part B coinsurance.  They go to the doctor and have elective surgeries more than they go to the barber and get new clothes.  Most importantly to the rat bastard politicians, my parents are retired so they now vote for a living instead of work for a living.  It is sick.

tbone654's picture

We've done this before...  It's Russia that looks more and more attractive...

swmnguy's picture

That's really the key to the whole shell-game, isn't it.  We all eventually pay for it, but for some reason a lot of people see a huge distinction between writing a check to the government, or writing a check to the insurance company, or writing a check to a clinic.  Sure, a near-majority don't pay Federal Income Tax.  But that's because they aren't earning enough money to surviive.  When you work full-time and don't earn enough to have to pay income tax, you could think of it as a huge tax you paid already, if you think of insuffiicient income as a form of opportunity cost.

There's no way out of the cost of health care.  It's too high.  We expect too much.  We eat synthetic shit, we don't exercise, we smoke and drink and poison ourselves, and then we keep 85 year-old stroke victims with advanced Parkinson's alive for a year in an ICU for millions of dollars (thinking of my maternal grandmother here) because we have a cultural aversion to basic facts of life.

Once this thing collapses, among other things we'll have to do is reconcile our values (provided to us by the marketing arms of the medical and insurance industries) to what humans everywhere have had to come to grips with since we became sentient (we all die, getting old sucks, and choosing the terms of our exit is probably the best we can do).

James-Morrison's picture

People cannot connect the dots. (At least not in time.)  

Once they connect the dots, they freak-out when they realize the dot they missed is the big one in the center of the bull's eye the government just painted on their backs.


darteaus's picture

It is designed to fail so that single payer can be positioned as the only solution.

swmnguy's picture

Any other solution would require some realism on the part of patients, and some cost management measures on the part of the industry.  Actually, so will single-payer, but more gradually.  But since we've been so resistant to any such reasonableness to this point, I'm hard-pressed to think of any other viable solution.

hedgeless_horseman's picture



It is designed to fail so that single payer can be positioned as the only solution.

Stop listening to AM radio and start making your own observations and thinking for yourself. 

Just say no to the Red Team / Blue Team divide and rule paradigm.

Midas's picture


My reading shows you to be the one playing red/blue.