Fwd: qotd: UNITE HERE report on ACA and worsening inequality

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-------- Original Message --------
Subject: qotd: UNITE HERE report on ACA and worsening inequality
Date: Tue, 11 Mar 2014 05:38:12 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



UNITE HERE
March 7, 2014
The Irony of ObamaCare: Making Inequality Worse

The promise of Obamacare was the right one and the hope for extending
healthcare coverage to the un- and under-insured a step in the right
direction. Yet the unintended consequences will hit the average,
hard-working American where it hurts: in the wallet. Currently a
national dialogue is emerging by all political parties on the issue of
income inequality. That is a debate worth having. The White House and
Congressional Democrats are "resetting" the domestic agenda following
the negative fallout from the rollout of the ACA. They plan to shift
focus from health care to bread and butter issues of income inequality
that have eroded the American paycheck for decades.

Ironically, the Administration's own signature healthcare victory poses
one of the most immediate challenges to redressing inequality. Yes, the
Affordable Care Act will help many more Americans gain some health
insurance coverage, a significant step forward for equality. At the same
time, without smart fixes, the ACA threatens the middle class with
higher premiums, loss of hours, and a shift to part-time work and less
comprehensive coverage.

* Transferring A Trillion Dollars in Wealth: Most of the ACA's $965
billion in subsidies will go directly to commercial insurance companies,
one of the largest transfers of public wealth to private hands ever.
Since the ACA passed, the average stock price of the big for-profit
health insurers doubled, their top executives were paid more than a half
billion dollars in cash and stock options, and in the past 2 years, the
top 10 insurers have spent $25 billion on mergers and acquisitions.

* Strangling Fair Competition: Before reform, different types of health
plans were regulated under different bodies of law. The Obama
Administration has blocked many non-profit health funds from competing
for the law's proposed trillion dollars in subsidies by refusing to set
fair regulations for different types of plans. The unbalanced playing
field will give employers of people covered by these plans powerful
incentives to drop coverage.

* Moving to Part Time Work: The Administration's experts say employers
won't follow the incentives and drop coverage. But they also told the
nation that employers would not cut workers' hours to get below the
30-hour per week threshold for "full time" work, even as 388 employers
announced hours cuts since early 2012.

* Cutting People's Pay: If employers follow the incentives in the law,
they will push families onto the exchanges to buy coverage. This will
force low-wage service industry employees to spend $2.00, $3.00 or even
$5.00 an hour of their pay to buy similar coverage.

Conclusion

For two years, labor unions and employer partners have patiently
explained to the Obama Administration and Congress the potential damage
that the ACA poses to these unique, successful non-profit health plans.

Having already made efforts to accommodate businesses, churches and
congressional staff, it is ironic that the Administration is now
highlighting issues of economic inequality without acting to preserve
health plans that have been achieving the goals of the ACA for decades.
Without a smart fix, the ACA will heighten the inequality that the
Administration seeks to reduce.

We take seriously the promise that "if you like your health plan, you
can keep it. Period." UNITE HERE members like their health plans. UNITE
HERE's plans are ready to compete with the corporate giants of the
health insurance industry if Washington will simply create a level
playing field.

http://cdn.ralstonreports.com/sites/default/files/ObamaCaretoAFL_FINAL.pdf

****


Comment by Don McCanne

UNITE HERE is a union of service workers in hotels and other industries.
Many of their members are insured through non-profit Taft-Hartley plans
with joint union-management governance structures. This report shows how
the Affordable Care Act can have a negative impact on the health care
coverage and hours of employment of union members, in effect making
inequality worse.

Some of their legitimate complaints:

* Employers are not required to make available health insurance to
employees who work less than 30 hours per week. Although the Obama
administration denies that this will cause employers to reduce the hours
that many of their employees work, it is already happening. Obviously
that reduces the employees' net incomes and may disqualify them from
receiving insurance coverage.

* Employers do not have to provide any health coverage at all if they
do not have more than 50 employees. Many employers are taking measures
to stay below the 50 full-time employee threshold.

* Employer penalties for not providing coverage are far smaller than
the employer costs of their health benefit programs. It is likely that
many employers will elect to pay the penalties rather than support a
health plan. Yet it is unlikely that employers will increase wages
enough to compensate for the lack of an employee health benefit program.

* Most UNITE HERE union members have wages low enough to qualify for
subsidies to help pay for plans obtained through the state or federal
insurance exchanges. Yet those subsidies cannot be used for employees in
the UNITE HERE Taft-Hartley plans. (They do indirectly receive the tax
benefit of deductibility for employer-sponsored plans, but at their
income levels, this benefit may be negligible.)

* More expensive plans will be subject to a 40 percent excise tax. The
UNITE HERE Taft-Hartley plans may be subject to this tax, not because
the benefits are too generous, but rather because health care costs are
so high and because many of the employees in the service industry union
are older with greater health care costs. This excise tax is borne by
the employee through higher premiums and forgone wage increases.

* All plans, including Taft-Hartley plans, pay taxes that are used to
ease the financial transition of private plans offered on the exchanges.
Though the union members ultimately pay these taxes, they receive none
of the benefits since Taft-Hartley plans do not qualify for transitional
financial support.

* Self-funded plans, such as these Taft-Hartley plans, are prohibited
from being offered to the public and thus cannot benefit from market
competition as the exchange plans can.

* ACA generously subsidizes private health plans with some of those
funds going to overpaid executives and wealthy shareholders, thereby
contributing to worsening inequality.

Although UNITE HERE calls for Congress and the president to level the
playing field through legislation and rule making, a far better solution
would be to establish a single payer national health program.

Under an improved Medicare for all, UNITE HERE union members would
receive more generous benefits, with first dollar coverage, and with a
net cost to them in taxes that would be significantly less than what
they are currently paying in premiums and forgone wages. A single payer
system would be more effective in reducing inequality than would
tweaking the Taft-Hartley plans.