White House Attempts to Buy Off UFCW

After United Food and Commercial Workers Union sent a letter criticizing Obamacare, Obama wants to ‘fix’ the bill for the UFCW- for half a trillion dollars.


We’ve previously gone over the “trouble in paradise” for the Affordable Care Act, where previous Obamacare supporters like the UFCW are now pulling their support now that they can see what was in the bill. A piece by Avik Roy in Forbes explains why the sudden criticism of the bill might be self-serving:

Obamacare affects multi-employer health plans, also known as Taft-Hartley plans. These plans consist of employer-sponsored health insurance that is arranged between a labor union in a particular industry, such as restaurants, and small employers in that sector. Approximately 20 million workers in the United States are covered under such arrangements, including 800,000 of the 1.3 million members of the United Food and Commercial Workers International Union….

Unsurprisingly, the focus of the UFCW’s criticism is really just on the places where it affects their own bottom line. Since employed union members would not qualify for the subsidies, This would pose quite a strange situation for the UFCW, who may find themselves with strange bedfellows in criticizing the policy.

In fact, the union’s position on Obamacare has already created issues for the UFCW’s new partners- the AFL-CIO. The UFCW recently left their old partners, Change to Win, and rejoined the AFL-CIO after eight years of being apart. Now, the AFL-CIO is losing members due to their position on Obamacare. The International Longshore and Warehouse Union, or ILWU, just pulled out 40,000 members, citing Obamacare as their chief complaint:

McEllrath expressed disappointment in Trumka for “going along to get along” and in the failure for the AFL-CIO to secure a government run single-payer healthcare system for its members.That’s right, Obamacare just isn’t liberal enough. McEllrath also ripped Trumka for his support of Obama’s 40 percent Cadillac healthcare plan tax.

That’s why it’s not surprising that the Obama administration is working to stop the bleeding. From the previously cited article:

Now, according to Rachana Dixit of InsideHealthPolicy, the administration is “working on regulations to address the issue” that people covered under Taft-Hartley plans aren’t eligible for subsidies. But it’s not an “issue” in the sense of being a glitch or a mistake; union leaders are seeking special treatment, and additional taxpayer subsidies, that other participants in employer-sponsored coverage don’t get.

Since the UFCW were such large supporters of Obama, it’s not surprising that the administration wants to do everything they can to get the union back on board. The piece goes on to explain that it’s not just the Administration, Members of congress are also on board. Nancy Pelosi is quoted as telling unions she wants to “resolve their concerns” – about as close as she may get to a mea culpa.

But there’s a very concerning element in all of this- what will this actually cost? Ultimately, to “fix” the law to support the unions, that will require subsidies. And these subsidies are going to end up costing the taxpayers even more:

If, suddenly, the 20 million people on Taft-Hartley plans were eligible for subsidies, Obamacare’s costs would skyrocket. If half of those Taft-Hartley enrollees gained $5,000 per year in tax credits along with their tax-free health benefits, we’re talking $50 billion a year in additional insurance subsidies for those individuals. That’s more than half a trillion dollars over ten years, accounting for health inflation.

So for Obamacare to be acceptable to the UFCW, it’ll take over half a trillion dollars- and that’s before more elements of the program kick in. The UFCW had previously been ecstatic about Obamacare:

The UFCW used its vast resources to push health care reform through Congress. Yet a majority of the Americans disapproved of the Patient Protection and Affordable Care Act.
The UFCW lauded the achievement “among the ranking highest in our national experience.” They may have been right with regard to the impact the Patient Protection and Affordable Care Act will have on the American experience. For example, it would add trillions of dollars in new government spending.

It seems the UFCW were even more right than we gave them credit for being at the time. Except the experience seems to have impacted the UFCW more negatively than they’d predicted. And now, to “fix” the problem, they’re going to add up to half a trillion more dollars to the Obamacare. Ultimately, it’ll be the taxpayers- union and non-union alike- that will be stuck with the bill.

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