March 11, 2014

MORE RUBES SELF-IDENTIFY: Unions Suffer For ObamaCare:

The first problem is that Obamacare regulations are already pushing up the cost of multiemployer insurance plans. Moreover, many of the regulations don’t really fit the plans — for example, many multiemployer plans do not distinguish between single and family policies, offering everyone the same insurance at the same cost.

The second problem is that the 40 percent excise tax on especially expensive plans — the so-called Cadillac tax — is going to hit union plans especially hard. Unlike most people negotiating compensation, union negotiators make an explicit trade-off between wages and other benefits, and the benefit that they seem most attached to is generous health plans. Union plans are made more expensive still because union membership is heavily skewed toward older workers. They are thus very likely to get hit by the Cadillac tax, which takes effect in 2018.

And the third problem is that Obamacare undercuts one of the key benefits of being in a union. Take a low-wage service worker who is currently insured through her union’s multiemployer plan. If she went to work for a nonunion shop, she could get a substantial wage hike, use part of it to buy a heavily subsidized exchange policy, and still be better off. As I heard one expert say, Obamacare turns health insurance from an organizing tool to a disorganizing tool.

Oft evil will shall evil mar.