June 5, 2009 Volume 110 Number 11

Unions say Wyden’s health care bill is sick

Three of Oregon’s largest unions launched a radio advertising campaign in Portland and Eugene last month attacking a bill that U.S. Sen. Ron Wyden is pushing to overhaul the nation’s health care system.

Leaders from the Oregon Education Association, United Food and Commercial Workers Local 555, Oregon Council 75 of the American Federation of State, County and Municipal Employees, and the Oregon AFL-CIO took part in a national press conference May 19 opposing Wyden’s Healthy Americans Act. Senate Bill 391 calls for taxing workers’ health insurance benefits as if it were income and eliminates tax deductions for employers that provide health insurance.

“One of the goals of health care reform is to make it more affordable,” said Ken Allen, executive director of Oregon AFSCME. “Taxing the value of health care benefits would raise health care costs for working families.”

Gail Rasmussen, president-elect of OEA, said labor is pleased that Congress is finally debating health care reform. “We’re just in opposition to this proposed idea of capping or eliminating the tax exclusion for employer-sponsored health care coverage.”

Rasmussen said many public education employees have in the past traded pay raises in exchange for a good health insurance plan. “Telling them they’ll now be paying more taxes would unfairly penalize them,” she said, adding that such an act could discourage people from entering the profession, or drive today’s teachers out of the profession.

UFCW Local 555 President Dan Clay said there are other, better ways to fund health care: “Raising taxes on those making more than $200,000 a year, closing international loopholes, and modifying state taxes.”

Clay said President Barack Obama is on the right track. “The right way is the way President Obama is leading us — a choice of the plan you have, another private plan or a public plan — with quality, affordable health insurance for every American,” he said.

In addition to taxing benefits, union officials are protesting two other aspects of the bill: Union members would be forced to give up their negotiated health care plans whether they liked them or not; and the bill doesn’t include a public option for workers to choose from.

Asked by a reporter why labor wasn’t pursuing a single-payer plan to eliminate all the wrangling over health care reform, Tom Chamberlain, president of the Oregon AFL-CIO, said a single-player plan isn’t going to happen.

“I don’t know if we ever get to single-payer in this country,” he responded. “What you’re talking about is tearing completely down the existing system and starting from scratch. I just don’t see how that’s going to happen.”

Wyden introduced SB 391 in February. The bill has a dozen co-sponsors, including Jeff Merkley (D-Ore.), Daniel Inouye (D-Hawaii), Arlen Specter (R-Penn), Joe Lieberman (I-Conn.), Mary Landrieu (D-La), Mike Crapo (R-Idaho), Bill Nelson (D-Fla.), Debbie Stabenow (D-Mich.), Maria Cantwell (D-Wash.), Lamar Alexander (R-Tenn.), Lindsey Graham (R- S.C.), and Bob Bennett (R-Utah).

“We’re deeply disappointed that Wyden won’t commit to a public option,” Allen said.

The three unions are sharing the cost of the $60,000 radio ad buy on stations airing in Portland and Eugene.

The group also has a Web site: www.stopwydenshealthtax.com.

The labor groups argue that taxing health care benefits would increase the cost of health care and lead many employers to stop providing health insurance altogether.

Though Wyden’s bill has garnered some bipartisan support, it may be stalled in the Senate, according to The Hill.Unlike wages, health coverage is not subject to income or payroll taxes. This exclusion is the single largest subsidy in the tax code; it is projected to reduce federal tax revenue (both income and payroll taxes) by more than $200 billion next year.AFSCME and other unions are pushing for a national plan that would allow you to keep your current health insurance plan if you want to, but allowing you (and everyone else) the option of switching to competing public health insurance plans. Such public plans would guarantee that every American, no matter their income level, has access to a health care plan — and, importantly, without that plan’s benefits being taxable.

Wyden’s proposal, U.S. Senate Bill 391, includes three key provisions that labor strongly opposes:

Your health care benefits would be taxed, which would in essence translate to the largest middle class tax increase in history.

You would be forced to give up your current (union-negotiated) health care plan, even if you like it and it works for you and your family.

There is no public health insurance option that would guarantee coverage and lower costs by competing with private health insurance plans.

“We could not move him,” said Allen. “He will not commit to having a public option in the bill and is insisting on taxing health benefits when employees receive insurance from their employers.”

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