WASHINGTON (CNN) – As the debate over health care reform moves into a new phase, White House Chief of Staff Rahm Emanuel is defending one proposal to help finance the nearly $900 billion price tag for Democrats’ ambitious plans to restructure the nation’s health care system.
“This is basically one of the ways in which you basically put downward pressure on health care costs,” the top Obama aide said Sunday on CNN’s State of the Union. “The president believes . . . it is helpful in getting costs under control and it hits the insurance companies and the high expansive and expensive plans.”
The possibility of a tax on health insurance plans with higher premiums and better benefits is driving a wedge between Democrats and many labor unions who have been longtime political allies of Democrats. In addition to being concerned about a possible tax on so-called “Cadillac” health insurance plans, unions are also concerned that the final version of health care reform legislation will not include a public health insurance option.
Labor leaders believe a public option would help union workers in negotiations with employers in an environment where escalating health care costs have dampened wage increases. The unions oppose a tax on “Cadillac” plans because they fear it could affect their middle- and working-class members who have foregone wage increases in the past in order to receive high-end health care coverage as part of overall compensation packages during collective bargaining negotiations.