Unions press senators not to tax 'Cadillac' health plans

WASHINGTON - Union leaders, among the most passionate backers of President Obama's health-care overhaul, pressed Democratic senators yesterday to drop a plan to tax high-value insurance plans to help pay for remaking the system.

Members of several labor unions denounced the proposed tax on so-called Cadillac plans, arguing it wouldn't just hit corporate chief executives but also middle-class workers who did without salary increases in return for better health benefits.

"I support health-care reform but I can't afford this tax," Valerie Castle Stanley, an AT&T call center worker and member of the Communications Workers of America, said at a news conference outside the Capitol.

The Senate has been debating the health bill since the beginning of last week but temporarily stopped yesterday afternoon to take up an unrelated spending bill.

Debate on the bill is expected to resume Monday.

At issue for the labor unions is a proposed 40 percent excise tax on insurance companies, keyed to premiums paid on health-care plans costing more than $8,500 annually for individuals and $23,000 for families.

The tax would raise $150 billion over 10 years to help pay for the Democrats' nearly $1 trillion health-care bill.

The legislation, which appears to be edging closer to passage, would revamp the U.S. health-care system with new requirements on individuals and employers designed to extend health coverage to more than 30 million uninsured Americans.

The threshold for insurance plans that would be taxed had been adjusted higher in response to union members' concerns, and Sen. John Kerry (D., Mass.), a leader of those efforts, has said there could be further changes.

But labor organizations, including the Teamsters, the AFL-CIO, and the National Education Association, are urging the Senate to drop the tax entirely and take the approach embraced by the House, which would raise income taxes on individuals making more than $500,000 a year and couples making more than $1 million.

Hundreds of union members have come to the Capitol this week to lobby.

"We should tax the millionaires, not teachers and bus drivers," said Lily Eskelsen, vice president of the National Education Association.

Sen. Bernie Sanders (I., Vt.), who spoke at the news conference, has authored an amendment with Sen. Sherrod Brown (D., Ohio) to strip out the insurance-plan tax, but does not yet have agreement from Senate leaders to offer it.

A number of Senate Democrats and White House officials support the insurance-plan tax because they believe it would help hold down health care costs by providing an incentive for companies and workers to spend less on health-care packages.

On the Senate floor yesterday, Sens. Byron Dorgan (D., N.D.) and John McCain (R., Ariz.) pushed an amendment to allow U.S. pharmacies and drug wholesalers to import Food and Drug Administration-approved drugs from Canada, Europe, and a few other countries.

It was unclear when a vote would take place, and people on both sides of the issue said it will be tough for supporters to get the 60 votes they need to win.

As a candidate, Obama supported allowing Americans to order lower-cost prescriptions from abroad. As president, he needs the backing of the drug industry, which opposes the idea, to push his health bill through Congress.

The FDA says it would be difficult to fully guarantee the safety of imports, lending weight to the industry's main argument.