NALC and Organized Labor Succeed In Obtaining Critical Improvements
To Congressional Health Reform Bill
Rolando Says Legislation Moving Through Congress
Provides ‘Significant Progress’ for American Workers
The NALC and much of the labor movement, led by AFL-CIO President Richard Trumka,have been successful in negotiating an agreement with the Obama administration and congressional leaders to significantly improve the financing provisions of pending health care reform legislation that will expand coverage to 30–35 million Americans who today lack health insurance.
The measure would also reform the discriminatory practices of the private health insurance industry, improve both Medicare and Medicare Part D, and make a serious attempt to rein in skyrocketing health care costs. Despite its $90 billion-a-year price tag, the reform would reduce the federal budget deficit while protecting the Federal Employees Health Benefit Program (FEHBP), which provides health insurance for NALC members and their families.
Major issues still remain to be resolved between the House and Senate versions of the legislation, but a vote on final passage could come before President Obama’s State of the Union message in February.
“Although this compromise legislation is disappointing to those of us who support a single-payer system or a strong public insurance option, it nevertheless represents significant progress for working Americans,” said NALC President Fred Rolando. “The bill will benefit letter carriers specifically by covering the uninsured members of their families and helping to keep the cost of health care from soaring out of control.”
The most contentious sticking point for NALC and the labor movement in general concerned a proposed excise tax on high-cost health plans slated to begin in 2013.
Originally targeted at family plans costing more than $13,000 per year (and self-only plans costing more than $6,500), this 40 percent levy on health plans was included in the Senate bill as a way to finance reform and to discourage excessive spending on health care.But it threatened to unfairly tax union health plans that were costly—not because of overly generous benefits, but because of demographic and geographical factors.
Thanks to relentless lobbying by NALC and other unions, the tax thresholds were increased first to $23,000 and $8,500 in the Senate and then to $24,000 and $8,900 as a result of the White House agreement reached by the AFL-CIO on January 14. Those thresholds will also be adjusted upwards to account for age and gender differences and to account for any surge in health care inflation between now and 2013. Furthermore, dental and vision coverage will no longer be counted against the threshold, effectively raising the levels by as much as an additional $2,000. In addition, the AFL-CIO deal secured an exemption for collectively bargained health plans through 2017; it was not clear whether the exemption would cover bargaining unit postal employees with FEHHBP plans.
“We had hoped to get rid of the excise tax altogether,” Rolando acknowledged, “but since the average cost of FEHBP plans ($13,000 for family and $6,900 for self-only) falls far below the new thresholds, our plans will not be taxed for the foreseeable future.”
“We are still concerned that the indexing of the thresholds is inadequate,” he added,“since health care premiums have traditionally risen much faster than inflation and FEHBP plans like the NALC HBP could be hit by the tax sometime in the next decade.”
Under the law, the thresholds for the tax will rise by the increase in the Consumer Price Index plus 1 percentage point. “Fortunately, we will have 10 years to fix the indexing provisions of the law or repeal the tax altogether,” Rolando said.