January 14th, 2010
12:54 PM ET
4 years ago

Democrats, labor unions reach tentative deal on 'Cadillac' plans

Washington (CNN) – Congressional Democratic health care negotiators, working with the White House, have reached a tentative deal with labor unions on restructuring a tax on high-end insurance plans, a key proposal to pay for health care reform, according to two sources familiar with the fast-moving talks.

The "Cadillac tax" is one of the major issues dividing House and Senate Democrats, who have been in intense negotiations with Obama administration officials at the White House over the past two days. Labor union leaders were instrumental in the bargaining, attending multiple separate meetings all week at the White House and on Capitol Hill.

Labor officials are trying to protect workers currently receiving high-cost plans from their employers. Over the years, many unions have negotiated generous health benefits - sometimes in lieu of wage increases.

Under the outline currently being discussed, which the sources stressed is still fluid, the threshold for the tax on insurance plans would be raised above what passed the Senate - which was a tax on insurance plans costing $23,000 and up for families.


In addition, health care policies for state and local workers and health care policies negotiated by labor unions would not be subject to the excise tax until 2017.

The sources also say a working idea is to remove dental and vision plans from the calculation.

One of the sources familiar with negotiations said that in addition to protecting health plans negotiated under collective bargain agreements, labor leaders are pushing to expand the deal to exempt health plans for all Americans making under $200,000 a year.

AFL-CIO chief Richard Trumka has made looking out for all workers - not just union members - a big part of his platform.

In an effort to ensure that the tax doesn't hit more people than currently envisioned, the working outline includes a mechanism to adjust the threshold for the tax upward in 2013 to avoid an automatic expansion. This is aimed at addressing a concern of many House Democrats that the tax on insurance plans could end up like the alternative minimum tax, which was intended to target upper-income taxpayers but, because of the way it was structured, eventually hit some middle class workers.

House Majority Leader Steny Hoyer said negotiators are working to get agreement on overall health care package by the end of this week.

"That's been the goal. But it's a goal, it's not a deadline," Hoyer said.

A senior leadership aide said Democratic leaders and White House officials want to send the bulk of the package to the Congressional Budget Office soon, even as soon as the end of this week. This aide said the controversial issues of abortion and immigration likely would not be resolved by then. Because these issues have no impact on cost of the bill, details on these can be worked out harseparately.


Filed under: Democrats • Health care
soundoff (58 Responses)
  1. Some republican guy

    How come I keep hearing people say no healthcare for ill eagles? The eagle is a noble bird and the symbol of or country. When one is sick, we should help it!!!! My grandbabies say that all the narcisstic obamabots and Oprah watching union thugs have barbecues where they cook bald eagles over burning American flags!!!! They want us to be socialists just like Canada!!!!! And what the heck kind of name is Trumka anyways???? Sounds Mexican. You libtarded obamabots with your buray hats and Chay Guevarro T-shirts drinking your Peeno Nwar (I don't know how to spell it because I speak American and not French like you obamabots) make me sick. It's time we real Americans take this country back from there evil clutches before it's to late and they round us all up and take us and our grandbabies to the reeducation camps!!!!!!!! Have a nice day!

    January 14, 2010 02:14 pm at 2:14 pm |
  2. jenn, philadelphia

    Can I get in on this deal-making too? No, wait being a single, non-home owner with no children tax-payer I'll be expected to pay for everyone else. Maybe I'll have some kids and let the government pay me to stay home.

    January 14, 2010 02:23 pm at 2:23 pm |
  3. Matt

    Ahh Democrats and Union Thugs selling out the little guy once again. So where is the change if they are still playing the same old game. Obama you are a fraud.

    January 14, 2010 02:35 pm at 2:35 pm |
  4. aneanderthal

    After these union goofballs have driven away all of the jobs and bankrupted the airlines and auto industries, only a dolt and his followers would give them a break in taxes. How much more will honest, hard working Americans who don't have to pay some fat union boss to do their thinking for them have to pay so the libs can keep their cozy relationship with these criminals and thugs.

    January 14, 2010 02:48 pm at 2:48 pm |
  5. Dstay

    Oh, what a shock that Obama & his slimy liberals in congress once again give in to the equally slimy and completely self-serving unions. Three things at the top of the list that should be banished forever from this country are Unions, the ACLU, & sleazy lawsuit attorneys. What a paradise our country would be without these horrible & bloodsucking entities.

    January 14, 2010 02:50 pm at 2:50 pm |
  6. WrongKindofChange

    Why do yhe Unions have any say in what our government decides. Oh wait...I forgot...the democrats bend to the Unions of the world not to the people of this country who elected them. I forgot.

    Yea the democrats brought "big change" to Washington...that big change is going into the pockets of the unions and other lobbiests they swore they would do away with.

    January 14, 2010 02:54 pm at 2:54 pm |
  7. Steve (the real one)

    Let me guess, this was NOT on C-SPAN either! Transparency?

    January 14, 2010 02:56 pm at 2:56 pm |
  8. Paul from Phoenix

    How is this fair to the average worker? I am not wealthy, and I am not in a union, but my company has a really good health plan. Well, I am screwed!

    So, Nebraska gets their's, Unions get their's. This bill in unbelievable! Dems have outdone the GOP in their unconstitutional ways!

    January 14, 2010 02:59 pm at 2:59 pm |
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