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January 15, 2010

Johanns: Union Deal Unfair and Unjustifiable


Senator Mike Johanns today criticized the latest back-room deal to emerge from the health care negotiations between Democrats in the Senate and House of Representatives. A deal has reportedly been reached to exempt union employees from a proposed 'Cadillac tax'-a 40 percent tax on high-cost insurance plans put in place to help pay for the $2.5 trillion bill.

"It is remarkable to me that despite the outcry over this bill and its back-room deals, Democrats start the new year with another special carve-out for another special interest group to get this limping bill across the finish line," Johanns said. "I don't know how my colleagues can agree to this deal and then turn around and claim this is reform when insurance costs will go up for hundreds of thousands of non-union Americans. In our right-to-work state, this special deal would literally lead to two workers doing the exact same job side by side, with the one without a union card paying 40 percent more for health insurance. There is a growing disconnect between what the American people want and what this piecemeal bill of special carve-outs gives them."

The deal would change the structure of health insurance tax plans:

• The original bill would place a 40 percent excise tax on all insurance plans at $23,000 and higher for families and $8,500 and higher for individuals.
• The new deal exempts policies covering workers in collective bargaining agreements, state and local workers and members of voluntary employee benefit associations through Dec. 31, 2017.
o Additionally, the threshold for the tax is raised to $24,000 for family plans and $8,900 for individuals.
• In 2017, all plans, union and non-union, could seek out coverage via the exchange.
• These adjustments will cost $60 billion. The Congressional Budget Office (CBO) originally projected this provision would generate $149 billion in revenue. That money will now need to be found in other places/other ways.
• CBO projects the entire 40 percent tax on plans will be passed on to consumers.

Labor statistics for Nebraska:

• In 2008, 8.3 percent of Nebraska workers belonged to a union; 10.7 percent of Nebraska workers were represented by a union. (Bureau of Labor Statistics)
o The latter number includes members of a labor union or an employee association similar to a union, as well as workers who report to no union affiliation but whose jobs are covered by a union or an employee association contract.
• Nebraska is one of 22 states with a "right-to-work" law, which states a person cannot be denied employment on the basis of union membership.



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