“If you already have health insurance through your job — and because many of you are members of unions, you do — nothing in this plan will require you or your employer to change your coverage or your doctor. Let me repeat: Nothing in this plan will require you to change your coverage or your doctor.” Those were the words spoken by President Obama at the AFL-CIO Convention in Pittsburgh on Sept. 15, 2009.
Since then, Congress has passed the Affordable Care Act (ACA) and it has been signed into law.
It has withstood a challenge before the Supreme Court. Regulations have been issued, exchanges created, and open enrollment is set to begin in a matter of months. Unfortunately, what also has become increasingly clear with each passing day is that the president’s statement to labor in 2009 is simply not true for millions of workers.
For decades, unions have negotiated high quality, affordable health insurance through nonprofit Taft-Hartley plans — one of the few reliable private providers for lower income individuals.
These plans are mutually agreed upon between union members and participating employers and provide insurance to millions of American workers.
In addition to being a long-standing and successful provider, these plans have been models of efficiency, achieving better cost savings than for-profit insurance carriers with medical loss ratios often exceeding 90 percent. That means 90 cents out of every dollar go to patient care.
Savings in healthcare can free up money for wages and pensions, and thus drive the economy forward for all of us.
But as currently interpreted, the ACA would block these plans from the law’s benefits (such as the subsidy for lower-income individuals and families) while subjecting them to the law’s penalties (like the $63 per insured person to subsidize Big Insurance). This creates unstoppable incentives for employers to reduce weekly hours for workers currently on our plans and push them onto the exchanges where many will pay higher costs for poorer insurance with a more limited network of providers. In other words, they will be forced to change their coverage and quite possibly their doctor. Others will be channeled into Medicaid, where taxpayers must pick up the tab.
In addition, the ACA includes a fine for failing to cover full-time workers but includes no such penalty for part-timers (defined as working less than 30 hours a week). As a result, many employers are either reducing hours below 30 or discontinuing part-time health coverage altogether. This is a cut in pay and benefits workers simply cannot afford. For example, a worker making $10 an hour that has his or her schedule cut by six hours a week would lose $3,100 a year in income. With millions of workers impacted, this would have a devastating effect on our economy.
Beginning next year, states are required to have health insurance exchanges up and running to cover the growing uninsured population in this country.
The ACA offers a subsidy to lower-income individuals and families so they can afford to purchase this insurance. As many of our members fall into this category, we believe the subsidy can and should apply to nonprofit plans. All we want is equality — where our plans are treated the same as for-profit insurers.
The Obama administration has refused our request, citing legal hurdles. But since the treatment of Taft-Hartley plans is not fully described in the ACA, we believe the regulatory process is exactly the appropriate place to deem them qualified health plans eligible for subsidies. Any objective review of the evidence and reasonable definition of what our funds provide leads to this conclusion.
We’d be open to a legislative fix, but ultimately this is the administration’s responsibility. They are leading the regulatory process. It’s their signature law.
We don’t want a handout. Our members want to keep the healthcare they currently have. Let me repeat — our members want to keep the healthcare they currently have. We just want them to be treated fairly.
Hansen is the president of the 1.3 million member United Food and Commercial Workers International Union and chairman of Change to Win.