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White House and Unions Reach Health Deal

 

After marathon negotiations this week, the White House, key Democratic leaders, and labor unions agreed on a compromise for what has come to be known as the "Cadillac tax," which would impose a levy on high-cost insurance plans. Labor leaders agreed to drop their opposition to the measure after Democrats said they would increase the threshold for plans subject to the tax to $8,900 for an individual (from $8,500) and $24,000 for a family (from $23,000). The cost of dental and vision would be excluded from this calculation starting in 2015, and, perhaps most importantly, health care plans negotiated under union contracts, as well as government employers, would be exempt from the tax until 2018, giving the unions time to negotiate new contracts. The changes in the tax would reduce the amount of revenue it would create by roughly 40 percent, according to the president of the AFL-CIO, although the White House has said it's too early to tell. Politico says that in order to make up for the lost money from the Senate bill, Democrats will be asking the hospital industry and the pharmaceutical industry to put up more cash for reform. Republicans immediately criticized the move as another example of Democrats buying support for the legislation. The deal means Democrats are closer than ever to getting health care legislation finalized, but, as the Washington Post notes, Democrats still have to figure out what the government-run marketplaces for insurance will look like. Obama seems to be in favor of the national exchange like the one that made it through the House, rather than a state-level approach favored by the Senate.

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Read original story in The New York Times | Friday, Jan. 15, 2010

-- Edited by Sanders on Friday 15th of January 2010 05:20:59 PM