Will unions get their special ObamaCare tax break?
It sure looks like President Obama is going to take care of his union pals at everyone else’s expense, judging from this article at the Washington Post:
Weeks after denying labor’s request to give union members access to health law subsidies, the Obama administration is signaling it intends to exempt some union plans from one of the law’s substantial taxes.
Buried in rules issued last week is the disclosure that the administration will propose exempting “certain self-insured, self-administered plans” from the law’s temporary reinsurance fee in 2015 and 2016.
That’s a description that applies to many Taft-Hartley union plans acting as their own insurance company and claims processor, said Edward Fensholt, a senior vice president at Lockton Cos., a large insurance broker.
How big of a cookie are union bosses getting?
Insurance companies and self-insured employers that hire outside claims administrators would still be liable for the fee, which starts at $63 per insurance plan member next year and is projected to raise $25 billion over three years.
Unions, a key Obama ally, have increasingly criticized the Affordable Care Act as threatening the generous medical plans held by many members.
Eliminating the reinsurance fee was one of several resolutions adopted at the AFL-CIO’s September convention, along with giving union plans access to ACA tax credits for lower-income members.
I’m sure those tax credits will be along eventually, although right now Obama’s political situation is so toxic that news of the special union tax break might earn his party a little hell from the non-union electorate. Just imagine what the millions of people losing their insurance because of ObamaCare will say when they learn the President is handing out tax breaks to his political allies. ObamaCare is not a “law,” it’s a system of aristocratic privileges… and, to modify the famed Mel Brooks quip from “History of the World, Part I,” it’s good to be a friend of the King.
Let’s hear some more about this tax everyone but the union guys will be paying….
The fee, scheduled to kick in next year, would shrink to $42 in 2015 and $26 in 2016, disappearing afterward. It would help insurers absorb the cost of care for people with preexisting illness enrolling in plans offered through subsidized marketplaces.
Both unions and business have criticized it as penalizing employer-sponsored health insurance to support plans bought directly from insurers.
The fee “takes money from the pockets of each laborer covered by a health and welfare fund and gives it to for-profit insurance companies,” Terry O’Sullivan, president of the Laborers International Union of North America, wrote in a letter to President Obama last summer.
Which is apparently just peachy for the rest of you peons, but unacceptable for labor unions, the most royally favored corporations in America, although the green-energy crowd gave them a good run for their money in the Solyndra days.
It’s also a rather naked example of how much of ObamaCare boils down to a cash pipeline from taxpayers to insurance companies, with the customary billions disappearing through leaky joints as the maze of pipes passes through Washington. After all, we’re talking about a system that makes the purchase of insurance mandatory, jacks up the price of insurance to un-Godly heights, and then pays off some of the elevated premiums for a great mass of lower-income people through taxpayer subsidies. It’s not surprising that a lot of insurance executives were eager to buy into that deal. They underestimated how badly the government plumbers would screw up when they laid the pipes, and how savagely the Little Partners in private industry would be attacked when the government needed a scapegoat for its failures.
If your’re going to support the concept of the government managing industries and redistributing wealth, you’d better grow comfortable with the reality of politically connected groups getting a better deal. That’s always going to happen. The statist responds only to threats, and effective threats come only from highly organized groups with lots of money and energy to invest in politics. Notice how the Democrats do not care, at all, about the people losing their insurance to ObamaCare – a group well on its way to seven or eight million people. They’re not organized, so they have no political clout; the Democrats quite literally tried to pretend they don’t exist at all.
Only when the story reached critical mass and sparked a broader revolution in the electorate – powerful enough to threaten an electoral landslide in 2014 – did panicked Democrats call an emergency meeting with Obama, and begin signaling their willingness to support some kind of legislation to enforce his false “keep your plan if you like your plan” promise. Disorganized political energy can still intimidate statists, but only when it’s huge.