Bloomberg News

Call to Change Obama’s Health Law Opens Rift With Labor Movement

September 12, 2013

The AFL-CIO is asking for changes to the Affordable Care Act, President Barack Obama’s landmark health-care overhaul, potentially opening fissures between the White House and one of its staunch political allies.

The largest U.S. labor federation approved a resolution yesterday urging amendments to the law in a voice vote on the final day of its quadrennial convention in Los Angeles.

The action by the AFL-CIO, which endorsed the law when it passed in 2010, adds to the political challenges facing the Obama administration as it implements the law. Republicans have vowed to block the union-backed changes, making it unlikely they could get through Congress.

“If the Affordable Care Act is not fixed and it destroys the health and welfare funds that we have all fought for and stand for, then I believe it needs to be repealed,” Terry O’Sullivan, general president of the Laborer’s International Union of North America, said on the convention floor. “We can’t have the unintended consequences for the proud men and women that we represent to be collateral damage in the health care fight in this country.”

Labor groups were among the strongest proponents of the health-care law when it was being debated by Congress, and the Obama administration is trying to maintain their support as it rolls out new insurance programs this fall. Two top administration officials, White House senior adviser Valerie Jarrett and Labor Secretary Thomas Perez, were in Los Angeles this week to reassure union officials that the White House is open to weighing changes.

Treasury Commitment

“We are committed to making the law work to make health care more effective and affordable for all Americans, including those covered by multi-employer plans,” Sabrina Siddiqui, a Treasury Department spokeswoman, said in an e-mail.

Larry Cohen, president of the Communications Workers of America, said the resolution is only the first step in the bid to fix the health-care law.

“Realistically there’ll be no progressive legislative fixes with the Republican House,” Cohen said in an interview. “All they want to do is eliminate health care and put people on their own. I don’t think this is going to get fixed in a meaningful way in the weeks ahead.”

The AFL-CIO’s resolution calls for changes to several provisions in the law. The union group wants multi-employer health plans run by labor organizations classified in a way that would make their members eligible for federal subsidies. It said it strongly opposes the law’s requirement that health plans, including union plans, pay a reinsurance fee of about $63 per member next year to the government.

More Employers

The resolution also urges expanding health care under the law to more employers, such as construction companies with five or more employees.

Debate on the resolution included pleas for amendments to the law and calls for union members to take a stand.

“This resolution is the make or break for a lot of unions in this room,” said Joseph Nigro, general president of the Sheet Metal Workers International Association. “This is our opportunity as a real labor organization to stand up and be counted.”

The 2010 law established public exchanges, through which individuals can buy insurance, which are set to open Oct. 1.

Without the subsidies that individuals using the exchanges are entitled to, some employers may stop offering group plans that many union members are currently enrolled in, according to Timothy Jost, a professor at Washington and Lee University School of Law in Lexington, Virginia. That will force those employees into the exchanges, which may cost more than their current health plans.

‘Devastating Impact’

The law as written “can have a devastating impact on our ability to provide health insurance,” O’Sullivan said.

About 42 percent of Americans remain opposed to the law, compared with 37 percent who support it, according to an August poll by the Kaiser Family Foundation. About 44 percent of those polled said they’re unaware whether the Affordable Care Act is still law.

Senator Orrin Hatch, a Republican from Utah, and Representative Dave Camp, a Michigan Republican, questioned the legality of the changes being sought by the unions. Republicans opposed the 2010 law and have sought a repeal.

“We will do whatever is within our power to ensure that the administration does not once again provide a special exemption to unions at the expense of American taxpayers,” the lawmakers said in a letter to Treasury Secretary Jacob J. Lew.

Thune Proposal

U.S. Senator John Thune, a South Dakota Republican, this week introduced legislation that would make it illegal to provide subsides for certain existing health care plans.

The average subsidy per eligible enrollee buying insurance through exchanges mandated by the law is projected to be $5,300 in 2014, according to the Congressional Budget Office.

Republicans will use labor opposition to the law to continue their attacks, Jost said. Unions, which represented 11.3 percent of workers in 2012, helped Obama’s campaign in 2008 and 2012 by getting Democratic voters out to the polls.

Richard Trumka, president of the AFL-CIO, the federation of 57 labor unions with 12 million members, supported the law when it was passed though has called for changes to a provision that defines a full-time workweek as 30 hours instead of the traditional 40. It has led some employers to create jobs with 29 1/2 hours of work a week to avoid paying for health care.

“The labor movement is engaging in an ongoing dialog with a number of federal agencies regarding implementation of the Affordable Care Act,” Trumka said. “The issues involved are ones of fundamental fairness.”

Perez, in an address to the convention on Sept. 10, thanked union leaders for supporting the health-care law.

“Though challenges remain -- as should be expected when working to solve any problem so big -- we are committed to continuing to sit down in good faith to work through solutions,” Perez said.

To contact the reporter on this story: Jim Efstathiou Jr. in Los Angeles at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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