The White House is still pushing an excise tax on high value insurance policies as a funding mechanism for healthcare reform. Dubbed by opponents the "Chevy tax" because it was targeted to hit tax plans for many middle class workers, most of the opposition to it has been from labor.
It turns out, though, that many more non-unionized workers could be subject to the tax than workers represented by a union, according to a new analysis from UC Berkeley.
The controversial tax has been widely viewed as a labor issue, but at least 80 percent of the workers whose plans would be subject to the tax in 2019 would be in nonunion jobs, according to the analysis by Ken Jacobs of the University of California at Berkeley Labor Center and William H. Dow, professor of health economics at Berkeley and a member of President George W. Bush's Council of Economic Advisers.
This impact is roughly in line with the overall breakdown of nonunion and union workers with employer-provided plans. And it would be true both under the version of the tax passed by the Senate and a more labor-friendly one the White House agreed to last month....
If employers remained with their current plans, the researchers estimate that 23 percent of plans would be subject to the tax by 2019 in the Senate version, while 14 percent of plans would be hit under the revised deal.
The fate of the tax in the ongoing Democratic discussions is unclear. The labor-friendly revisions may be jettisoned because of the political attacks on them, but unions and many House Democrats remain firmly opposed to the original version.
Rep. Joe Courtney (D-Conn.), a leading opponent of the tax, said the analysis "confirmed what I've been saying all along -- this is a much bigger issue than labor-union households."
"The momentum in the House against it has gotten even worse," he said. "The more this thing has sunk in, it's become politically dangerous in the minds of a lot of members."
Some takeaways from the report:
While the potential effect on union plans is significant, union members are a relatively small fraction of the total population that would ultimately be affected by the tax, under either the Senate bill (December 2009) or the proposed amendment (January 2010). Key findings:
• Our analysis shows that workers in union firms would be less likely than those in non-union firms to be affected by the tax in the initial years. Workers in union firms would be more likely to be affected compared to their non-union counterparts in the later years, beginning in 2019 under the Senate-passed bill and in 2024 under the proposed amendment.
• The vast majority of employees affected by the excise tax are not covered by a union contract. This is true for both the Senate bill and the proposed amendment. Because many more workers are in non-union plans, fully 80 percent of the workers whose plans would be subject to the excise tax in 2019 under the Senate bill are not covered by collective bargaining agreements. Under the proposed amendment, the amount is slightly higher at 83 percent.
• We project that excise tax revenues will be reduced $41 billion under the White House-union leaders’ amendment. Of that, 71 percent would accrue to employees who are not covered by a union contract.
The excise tax could help curtail increasing costs in the system, but to be politically effective and sustainable, it has to be well-targeted to not hit middle class workers. Atrios nails it, in this case talking about the public option, but it's true for the larger reform effort:
I've said it a million times, but ultimately HCR has to be a popular bill. Not popular in a poll-tested optics kind of way, but popular in the sense that people who feel like they're getting screwed by their insurance companies find that the changes help them, and significant numbers of people who didn't have decent affordable insurance will actually get that.
You only need to go back to the Medicare Catastrophic Coverage Act (MCCA) of 1988 debacle to see that principle at work.