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.