Says unions call Obamacare “bad for workers.”
Sen. Mike Lee, R-Utah, in a USA Today op-ed Aug. 4
A small but vocal cadre of congressional Republicans would like to defund Obamacare and would be willing to risk a government shutdown to make that happen. A leading voice in the Senate is Mike Lee of Utah. Lee says the new law is so bad, even key Democratic allies don’t like it.
“By a margin of 2 to 1, Americans say Obamacare will make their family’s health care situation worse, not better. Just 12 percent support the individual mandate. Doctors don’t want it. Businesses oppose it. Unions say it’s bad for workers,” Lee wrote in an op-ed in USA Today.
That last group, the unions, caught our eye. Organized labor is one of the pillars of the Democratic Party and lobbied hard for passage of the Affordable Care Act. We wanted to verify that Lee had his facts right.
Unions that oppose the law
Several unions have called for changes to Obamacare out of concern for how it will affect the health coverage their members receive. Some of those with the biggest objections to the health care law offer health insurance through unusual plans that allow large and small employers to buy coverage as a group.
Randy DeFrehn is executive director of the National Coordinating Committee for Multiemployer Plans, a sort of trade association for these insurance groups. DeFrehn said at least six unions have gone public with their objections to Obamacare. Behind the scenes, he said, the number is at least twice that.
“They don’t all want to come out against the administration,” DeFrehn said, “but they are worried about the unintended consequences of the law.”
In contrast, some very large members in DeFrehn’s organization actively support the law. That includes the Service Employees International Union, which represents housekeepers, janitors and other lower-paid workers.
Even among the unions that warn of the dangers of the new law, for most of them, repeal is not the first choice. A letter to top Democrats from the Teamsters, the United Food and Commercial International Union and Unite-Here, which represents hotel workers, called for “common-sense corrections.” DeFrehn said that goal prevails, although calls for repeal could be the result of “ultimate frustration.”
What the unions don’t like
A central problem with the law, in the unions’ view, is the threat it poses to the kind of health insurance their members enjoy today.
These plans are often called Taft-Hartley plans after the federal labor law that created them. And here’s the rub: The Affordable Care Act creates insurance exchanges that will present employers with an alternative to the union insurance.
“The unions think it will be cheaper for employers to drop out of the Taft-Hartley plans and go on the health exchange,” said Paul Secunda, a labor law professor at Marquette University. “This puts pressure on the unions who want to keep workers satisfied and make sure they have a reason to belong to the union.”
Here’s why the unions think that could happen: DeFrehn says 90 percent of the employers in these plans have fewer than 50 workers. While larger employers will face penalties if they don’t offer health insurance, these smaller employers would not. At the end of a union contract, they would be free to drop coverage and encourage workers to buy through an exchange.
The exchanges could also be an attractive option because of a federal subsidy that would be awarded to workers with family incomes as high as 400 percent of the federal poverty level. A calculator from the Kaiser Family Foundation, a nonpartisan health policy group, shows that a family of four making $92,000 a year would get about 25 percent knocked off the premium. That’s a discount Secunda says would put the union plans at a competitive disadvantage.
There’s reason to think that some employers will drop coverage. Marshall Babson is a longtime employment lawyer and former member of the National Labor Relations Board, appointed by President Ronald Reagan. Babson, who represents management, said that for the past 20 years, he has advised clients to get out of Taft-Hartley plans. He said they are inefficient.
“If the Affordable Care Act is a threat to these plans,” he said, “it’s because they have been vulnerable for a long time.”
This is the union fear. What would actually happen under Obamacare is unknown.
Jared Bernstein was an economic adviser to Vice President Joe Biden during the drafting of Obamacare. Now a senior fellow at the Center on Budget and Policy Priorities, which focuses on how government programs affect people of modest means, is optimistic that the Taft-Hartley plans will remain viable.
“One of the myths is that employers will willy-nilly dump their plans and put people on the exchange,” he said. “Typically, these plans are offered for a reason. They are an important part of the compensation package that makes sense for keeping the workers you need to run a business. The ACA won’t change that.”
But some unions, at least, are unwilling to wait and find out.
Our ruling
Sen. Mike Lee said unions say that Obamacare is bad for workers. At least six unions have warned that Obamacare will undercut health care coverage for their members. The evidence suggests that more unions share that view.
Some large unions, however, continue to support the Affordable Care Act. And while Lee would like to do away with the new health care law, even unions with deep concerns seek to fix the law, not repeal it. Still, a significant number of prominent unions oppose the law as it now stands, and not every union would need to feel that way in order for Lee’s statement to be accurate.
We rate the claim Mostly True.
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