health reform

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via AFL-CIO NOW BLOG | Send a Letter Today Urging Congress to Pass Quality Health Care Reform

by Mike Hall, Sep 30, 2009

Local unions, central labor councils, state federations and national unions are redoubling their efforts to ensure health care reform legislation—which could be on the Senate floor as early as Oct. 13 and in the full House later in the month—is real reform that

• Controls costs.
• Provides guaranteed coverage.
• Holds insurance companies accountable.
• Includes a public health insurance plan option.
• Requires all employers to pay their fair share.
• Rejects new taxes that would hurt working families—who already are being crushed by soaring health costs.

Let me interject something here concerning that last bullet. Senator Max Baucus, in his “chairman’s mark” he included in the bill now under intense debate in the Senate Finance Committee, a proposal for an excise tax on the most generous insurance plans. That tax is referred to as the Cadillac tax, and it would only effect the plans that meet certain values. These generous insurance plans would be taxed as one’s income is taxed, being a big part of the benefit package offered to an employee.

But the sticky part is that there are union members and others who aren’t rich by any means, but have very expensive health plans from their employer. A union member’s health plan is negotiated whenever contracts expire and are often weighed as heavily or heavier than wage increases, meaning the union rank and file would rather give up a larger wage increase if it means getting a juicier and larger health care package. This new Cadillac tax could kick in now, or after their health benefit package grows in the years to come, and burden them with higher taxes if portective language isn’t placed in the bill now.

What’s good about it? The good part of this Cadillac tax is that it will pay for a big chunk, maybe as much as 35%, of the cost of the health reform bill.

The Cadillac tax is the subject of an article from a couple days ago in Bloomberg.com.

“The discussion of Cadillac plans doesn’t acknowledge ordinary people who gave up salary increases to get high-value plans,” said Senator Debbie Stabenow, a Michigan Democrat.

[Senator Max] Baucus originally proposed a 35 percent excise tax on plans worth more than $8,000 for an individual or $21,000 for a family. He then suggested increasing the tax to 40 percent, while lifting the thresholds to $8,750 and $23,000 for retirees or those in union-heavy industries like coal mining. [Senator John] Kerry wants to raise the thresholds to $9,800 and $25,000 and move them even higher for people between the ages of 55 and 65.

That means that if the premiums for your health insurance package from your employer are more than $25,000 for you and your family, if the cost to the employer to provide super duper insurance is more than $25,000 per year, then you will be liable for a 35% excise tax on that insurance package. In other words, they are treating that insurance as a luxury and as income. Your insurance package would be reported to the IRS and the 1040 forms amended to include a block under “wages, salaries, tips, etc.”. The bad part of the Cadillac tax is that it could hit average Americans hard, something that Obama campaigned against.

Do you want that?

Me neither. So, write letters to these knuckleheads in Congress at let them know it.

Please join union members across the nation in writing your senators and member of Congress to tell them to pass real health care reform. It’s critical working families speak up and provide a loud counter voice to the health insurance industry’s money and influence. Congress needs to hear from people who can tell their lawmakers about their personal struggles with a broken health care system and why we need real health care reform.

Letters from union members, many of which will be written during breaks on the job site, at local union meetings and via special letter-writing events, will be delivered to lawmakers next week when activists and union leaders travel to Capitol Hill to meet with them or during the Columbus Day recess when union activists meet with the representatives in their home districts during the Columbus Day recess.

Contact your local central labor council or state federation for more information on actions in your area. Union members also can go to the Working Families Toolkit (www.WorkingFamiliesToolkit.com, registration required) for sample letters, fact sheets, fliers and more information on health care reform.

We’re also planning a national health care call-in day to Congress on Oct. 7. Union members can urge their representatives and senators to back health care reform that includes a strong public option. Call 1-877-3-AFL-CIO (1-877-323-5246).

So what are you waiting for? You don’t have to be a union member to help with this effort. Write that letter! Tell Congress to pass meaningful health reform with a public option and include protection for wage earner’s health plans from a new tax.