A.F.L.-C.I.O. to Push for Overhaul With Public Option

September 14, 2009, New York Times

President Obama’s embattled health care plan will get a welcome and full-throated push from the A.F.L.-C.I.O. on Tuesday.

The federation’s delegates are set to approve a resolution that says the nation’s health care system is badly broken and that backs a far-reaching overhaul that would include a government-run option to compete with private insurers.

“We stand ready to do everything we can to enact reform,” the resolution states.

The labor federation — representing nearly 10 million workers and one of the most powerful lobbying forces in the nation — is scheduled to approve the resolution the same day that Mr. Obama speaks at the A.F.L.-C.I.O.’s convention in Pittsburgh.

The resolution states, “For more than 100 years, America’s unions have called for universal coverage built on a social insurance model.”

The federation’s resolution calls for creating universal coverage and requiring all employers to contribute to the cost of health care through a “pay-or-play” system. In addition, the resolution supports special federal assistance to companies that provide health coverage to retirees under age 65, as many unionized companies do.

The resolution strongly backs the public option, saying it would force private insurance to cut costs and premiums.

“A public health insurance plan is crucial to making health care coverage more affordable for working families, business and government,” the resolution states. “A public plan would have lower administrative costs than private plans and would not have to earn a profit. These features, combined with its ability to establish payment rates, would result in lower premiums for the public plan.”

In a discussion of the shortcomings of the current system, the resolution states, “Our present course is unsustainable.” It notes that health care premiums for family coverage have more than doubled over the past decade and that health costs now consume about 18 percent of G.D.P., with government economists estimating the figure will reach 34 percent by 2040 in the absence of reform.

“Health care costs are burdening American businesses, in addition to workers,” the resolution says. “U.S. firms that provide adequate health benefits are put at a significant disadvantage when they compete in a global marketplace with foreign firms that do not carry health care costs on their balance sheets.”

Mr. Obama’s proposal would exempt many small businesses from the “pay-or-play” provision, which would require employers that do not provide coverage to pay an assessment per uninsured employee.

But the federation’s resolution says that the pay-or-play provision should apply to all firms, regardless of size. The resolution adds that if small businesses are exempted, exemptions should be based not on the number of employees, but on payroll or gross receipts, because some small businesses, like law firms or doctors’ offices, can easily afford to pay such assessments.

Not surprisingly, the federation calls for a surtax on the wealthiest taxpayers to help finance health care reform. At the same time, the resolution opposes proposals to tax employer-provided health benefits over a certain monetary amount as a way to help finance reform: “Employers likely would respond by increasing employee cost-sharing to a level at which benefits would become unaffordable for low-wage workers, or by eliminating benefits altogether.”

The resolution says that such a move would mostly hurt employers that have many older workers or workers with family health plans that cover children.

In addition, the resolution criticizes a proposal that the Senate Finance Committee appears to favor: an excise tax that insurance companies would pay on group health care policies of more than $21,000 per employee. The federation fears that such a move would cause insurance companies to charge employers more and then employers might either end coverage to some employers or force employees to shoulder more of the cost.

“In effect, this excise tax would be an indirect tax on workers, since insurance companies would almost certainly pass costs on to workers,” the resolution says.

The federation is also expected to back a secondary resolution that endorses creation of a single-payer health plan, much like Canada’s.