Labor Pains: Because Being in a Union can be Painful

Union-made Cadillac Health Plans

cadillacThe tax on so-called gold plated insurance policies, which are understood to be held by the wealthiest among us, is designed to help pay the cost of the health care bill.  Senators and Congressman perhaps feel a sense of pride including said tax in the bill, because many of them also hold these gold-plated policies. But the finer points of the tax, introduced by Senator Max Baucus last Wednesday have unions spooked.  It would apply to them as well.  The New York Times reports:

As it turns out, though, many smaller fish would get caught in Mr. Baucus’s tax net. The supposedly Cadillac insurance policies include ones that cover many of the nation’s firefighters and coal miners, older employees at small businesses — a whole gamut that runs from union shops to Main Street entrepreneurs. Under the Baucus plan, insurers selling a plan costing more than $8,000 for an individual and $21,000 for a family would have to pay a 35 percent excise tax on the excess amount. […]

Bruce Hodson is a state employee in Maine and the president of Local 1989 of the Service Employees International Union, where the cost of a family plan is now running at about $20,500 a year. At the typical pace of health premium inflation, his policy could very likely set off the tax if it goes into effect in 2013, as the Baucus plan proposes.

Of unions getting stuck paying the tax, President Obama had the following to say:

On Sunday, President Obama said he saw the need to protect union members, but he also defended the tax. “I do think that giving a disincentive to insurance companies to offer Cadillac plans that don’t make people healthier is part of the way that we’re going to bring down health care costs for everybody over the long term.”

Image courtesy of Voxphoto.

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