House Dems Debate Cadillac Tax on Insurance Plans
House Democrats met Thursday to devise a negotiating strategy as the
two chambers begin to hash out differences between their respective
health care bills.
Democrats were nearly unified in calling for the House to push to
include its revenue-raising mechanism -- a surtax on the wealthy --
rather than the Senate plan to tax so-called "Cadillac" insurance
Unions strongly oppose the tax on insurance, which would
disproportionately hit their members. And as health care costs soar,
more and more plans will be caught by the tax.
House Speaker Nancy Pelosi (D-Calif.) told the caucus she's pushing
hard and that union efforts should be directed at swaying the White
House rather than her.
"What are you calling me for?" Pelosi said she jokes with labor when they press her on the issue.
As a candidate, Obama shredded his opponent, John McCain, for
proposing just such a tax. McCain's embrace of the idea, in fact,
deeply damaged his standing among union households, internal labor
Now in the White House, Obama is supporting the tax on insurance plans.
Freshman Rep. Jared Polis (D-Colo.), who has long been critical of
the surtax on the wealthy, which he worries could hit small businesses,
spoke up in favor of the tax on insurance. His comments about union
opposition to the tax struck some on the call as surprising. Big Labor
may be opposed to it, he told his colleagues, but the unions support
the Senate plan, which must mean that they'll go along with a bill that
includes such a tax.
"I said that the unions supported the Senate bill, which they did,"
Polis told HuffPost. "So that was just a simple factual statement that
the unions supported the bill in the Senate. That was my only mention
of unions in my comment."
The AFL-CIO, however, did not back the Senate bill. "But for this
health care bill to be worthy of the support of working men and women,
substantial changes must be made," said the union's statement upon
passage. "[B]ecause it bends toward the insurance industry, the Senate
bill will not check costs in the short term, and its financing asks
working people and the country to pay the price, even as benefits are
cut. The House bill is the model for genuine health care reform.
Working people cannot accept anything less than real reform."
Polis said that he thought the tax could get broad support among
House Democrats if the price that defines a Cadillac plan is lifted by
a few thousand or if it is indexed to the growth of health care costs
or if families under a certain income level are exempted.
James Kotalik, a Colorado shop steward with the Service Employees
International Union local 105, told HuffPost he's still pushing Polis
to oppose the tax. "The excise tax on benefits in the Senate health
care bill will affect many middle class Americans, including me. I work
as a radiological technologist and my health plan is good, but by no
stretch of the imagination is it a 'Cadillac plan.' Yet it would likely
be subject to the excise tax when it goes into effect. And since
medical inflation is rising much faster than overall inflation, every
year more and more people will be affected," he said. "If the goal is
to have accessible, affordable, quality healthcare for everyone, why is
the mark being lowered? That's why we continue to urge our
Representatives in Congress to oppose the tax on benefits."
Polis, however, has the president for cover. "My position on how we
should pay for health care reform is much more similar to President
Obama's. President Obama asked us to use this particular mechanism
because it can reduce health care costs," Polis told HuffPost, adding
that one other Democrat spoke up on behalf of the tax.
Rep. Carol Shea-Porter (D-N.H.) spoke in opposition to Polis. a"I
was standing up for my constituents," she said. "I have serious
concerns about the excise tax proposal and the effect that it could
have on middle class families in New Hampshire and across the country."
Democrats on the call also griped about some recent reporting. Rep.
Lucille Roybal-Allard (D-Calif.), chair of the Congressional Hispanic
Caucus, said that reports that
the caucus was leveraging health care to get a commitment from the
White House on comprehensive immigration reform are incorrect.
Pelosi pushed back against reports that the House would be rolled by
the Senate in cross-Capitol negotiations over the final health care
"Don't buy into that," Pelosi told the caucus, according to a person
on the call, then added, emphasizing each word: "Not true for a second."
Much depends, however, on who's defining rolled. The Speaker and the
members of her caucus did not vow to hold out for a public health
insurance option or commit to oppose any bill that didn't include one,
as more than 50 members had previously promised.
The House bill includes a public option; the Senate bill does not. (The public option died in December.)
The House members, meanwhile, argued that if the bill doesn't
include a public option, aggressive measures are needed to keep
insurers honest and make plans affordable. Several caucus members
emphasized the importance of increasing subsidies to make private
insurance more affordable -- insurance that people will be mandated to
Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce
Committee, pushed for the House version of a national insurance
exchange, according to a leadership aide. A national exchange would be
easier to police and create more competition, advocates argue; the
Senate plan creates exchanges in each of the 50 states.
Rep. Louise Slaughter (D-N.Y.), chair of the Rules Committee, made
the case for including House language that revokes the antitrust
exemption currently enjoyed by insurers.
More than a hundred members joined the call and 25 either spoke or asked questions, said a leadership aide.
Waxman also spoke out forcefully against giving any special
treatment to states that happen to be represented by swing-voting
Democrats, according to a person on the call. There was no disagreement
on that question.
Senate and House staff will be working through the weekend on
merging the bills, Pelosi told her members. The full House caucus will
meet on Tuesday back in Washington, as the House gets back to business.
The Senate doesn't return until the next week.