NCPA - National Center for Policy Analysis

Will Unions Be the Death of ObamaCare?

May 30, 2013

When the Obama administration pushed through the Affordable Care Act ("ObamaCare"), it counted on labor unions to be the strongest supporters, but some unions leaders have grown frustrated and angry about what they say are unexpected consequences of the new law. These consequences create problems that could jeopardize the health benefits offered to millions of their members, says the Associated Press.

The problem lies in the unique multiemployer health plans that cover unionized workers in retail, construction, transportation and other industries with seasonal or temporary employment.

  • Known as Taft-Hartley plans, they are jointly administered by unions and smaller employers that pool resources to offer more than 20 million workers and family members continuous coverage, even during times of unemployment.
  • The union plans were already more costly to run than traditional single-employer health plans. The Affordable Care Act has added to that cost -- for the unions' and other plans -- by requiring health plans to cover dependents up to age 26, eliminate annual or lifetime coverage limits, and extend coverage to people with pre-existing conditions.
  • Workers seeking coverage in the state-based marketplaces, known as exchanges, can qualify for subsidies, determined by a sliding scale based on income. By contrast, the new law does not allow workers in the union plans to receive similar subsidies.

Labor unions have been among the president's closest allies, spending millions of dollars to help him win reelection and help Democrats keep their majority in the Senate. The wrangling over health care comes as unions have continued to see steady declines in membership and attacks on public employee unions in state legislatures around the country. The Obama administration walks a fine line between defending the president's signature legislative achievement and not angering a powerful constituency as it looks ahead to the 2014 elections.

Union officials have been working with the administration for more than a year to try to get a regulatory fix that would allow low-income workers in their plans to receive subsidies. But after months of negotiations, labor leaders say they have been told it won't happen.

The issue could create a political headache next year for Democrats facing reelection if disgruntled union members believe the Obama administration and Congress aren't working to fix the problem. Last month, the union representing roofers issued a statement calling for "repeal or complete reform" of the health care law. This could cause major problems for ObamaCare in the near future.

Source: Sam Hananel, "Some Unions Now Angry About Health Care Overhaul," Associated Press, May 24, 2013.


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