AFL-CIO warns Reid against tax on high-cost healthcare plans in bill

AFL-CIO President Richard Trumka warned Senate Democratic leaders not to include a tax on high-cost healthcare plans in a bill that is expected to reach the floor in coming days.

Trumka dismissed the notion that Democratic leaders could placate the powerful union by raising the threshold on plans that would be subject to the tax. Under the Senate Finance Committee’s bill, plans costing more than $8,000 for individuals and $21,000 for families would be hit with a 40 percent excise tax.

“Working families struggling to pay for healthcare should not be required to pay even more in the form of a new tax,” said Trumka in a telephone call with reporters. “When you fail to force [insurance] companies to be competitive and employers to pay their fair share, you have to come up with money elsewhere.

“It’s a bad policy, bad politics and totally unacceptable to put the cost of healthcare on the backs of working families,” he said.

Trumka’s press call came as Senate Majority Leader Harry Reid (D-Nev.) took steps toward bringing the Senate bill to the floor.

Multiple media outlets reported Monday that Reid was sending legislation to the Congressional Budget Office for scoring. Reid has been working for nearly two weeks on combining different healthcare measures approved by the Senate Finance Committee and the Senate Health Committee.

Reid has scheduled a 3:15 press conference, during which he is expected to talk about what is in the final bill, which will reportedly include a public health insurance option that allows states to opt out.

Trumka also said his union does not support establish a national government-run health insurance program that allow states to opt out, which has emerged as a possible comprise in recent weeks.

Asked Monday if he would support the new “opt in/opt out” public option, Trumka said flatly: “No.”

However, he then qualified his statement, and said the emerging public option compromise is "on its way but it’s not there yet."

Trumka praised the House health bill as having a more effective public option and fairer financing compared to its Senate counterpart, which Trumka said would effectively tax middle-class workers through the tax on so-called “Cadillac plans.”

At the same time, Trumka expressed optimism that a deal will be reached on healthcare reform, saying the debate is “moving in the right direction.”

An AFL-CIO spokeswoman downplayed the idea that the proposed insurance tax has created friction between Reid and Trumka.

Amaya Tune noted that Trumka praised Reid for listening to union concerns.

"Senator Reid is working hard to lessen the impact of this tax and we appreciate his hard work on this," Trumka said, before giving a more enthusiastic endorsement of House Speaker Nancy Pelosi (D-Calif.), whom he touted as "doing a great job of crafting legislation that doesn't finance healthcare by taxing working families."

The AFL-CIO president, who took office in September, said that the opt-out provision in the Senate bill falls short of the “robust” public option the union supports, but suggested the provision is “on its way” toward being something the organization could support.

“We cannot be in favor of reform for reform's sake. This is the moment to make sure that it's real,” Trumka said. “The fight now is about what reform will look like.”

As the House and Senate bills near completion in each chamber, Trumka said that the AFL-CIO, along with the labor coalition Change to Win, would organize a push next Thursday, Nov. 5, in which union members will wage a public phone call campaign encouraging lawmakers to support their preferred outcomes in the health reform debate.

Eric Zimmerman and Michael O’Brien contributed to this story.