Unions Say Obamacare Will Shatter Backbone of Middle Class

Unions: Obamacare Will Shatter Backbone of Middle Class

July 17, 2013

Wall St Cheat Sheet - The Affordable Care Act now has a formidable opponent in U.S. labor unions. The unions were a key ally in the law’s passage: They spent a large sum of money on the congressional campaigns of Democrats in 2006 and 2008, and union leaders lobbied in favor of health care reform in 2009 and 2010. But with growing worries that the legislation will disrupt the health benefits of its members, America’s largest unions are asking Congress to step in.
 

Representatives of three of the nation’s largest unions sent a letter to Democratic Sens. Harry Reid of Nevada and Nancy Pelosi of California on Thursday.

“When you and the President sought our support for the Affordable Care Act, you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat,” letter said. 

“Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour workweek that is the backbone of the American middle class.”

The letter was written by James P. Hoffa, general president of the International Brotherhood of Teamsters; Joseph Hansen, international president of the United Food and Commercial Workers International Union; and Donald Taylor, the president of Unite-Here, a union representing hotel, airport, food service, gaming, and textile workers.

Their letter noted that their respective unions have long been supporters of the idea that all Americans should have access to quality, affordable health care. 

“We have also been strong supporters of you,” the three union presidents wrote. “In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.”

But the problem is that “this vision has come back to haunt us.”

The union leadership is seeking “reasonable regulatory interpretations” to the Affordable Care Act that would help prevent the destruction of nonprofit health plans. However, according to the letter, earlier requests for government action have been “disregarded and met with a stone wall by the White House and the pertinent agencies.” In their opinion, this disregard compares unfavorably with how the administration responded to requests made by other so-called stakeholders, citing the government’s decision to make a “huge accommodation” for the employer community by extending the deadline for the employer mandate and penalties.

“Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it,” wrote the union leaders. “The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios.”

The letter lists three complaints. First, that the law creates an incentive for employers to keep workers’ hours below 30 hours per week. Second, that millions of Americans, including a great majority of union members, are covered by nonprofit health insurance plans. But with the implementation of Obamacare, union workers will be “treated differently and not be eligible for subsidies afforded other citizens.” Finally, the letter argued that while union, nonprofit plans will not receive the same subsidies, they will be taxed to pay for those subsidies.

Hoffa, Hansen, and Taylor believe that there are “common-sense” fixes that can be made to the legislation that will allow union members to keep their current plans and benefits as Congress and President Barack Obama promised. Unless the changes are made, they said that pledge is hollow.

“We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions,” the letter concluded.