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. Kevin in Ohio

    Of course. The criminal Union bosses are in bed with this admisitration.

    January 14, 2010 01:00 pm at 1:00 pm |
  2. Eric

    I have a pre-existing condition which requires monthly lab work and doctor visits and I pay less than 2000.00 a year for great insurance... Anyone paying 24k (6k per person if you figure a family of 4) a year for insurance needs to shop around or stop crying about money spent on what should honestly be called a luxury tax... What does that kind of coverage include? solid gold breast implants?!?!?

    January 14, 2010 01:02 pm at 1:02 pm |
  3. Mike in SA

    Yep, line up the Dems and back up those dump trucks full of money. It's payoff time!!!

    January 14, 2010 01:03 pm at 1:03 pm |
  4. Jeff

    It's a shame the Dems want listen to anyone other than the UNIONS..
    What about everyone else, I guess they could care less about us.

    January 14, 2010 01:14 pm at 1:14 pm |
  5. liberal wingnut

    These "Cadillac" insurance plans for the UAW is what helped bankrupt GM. I'm glad to see they are getting a free pass for this garbage health bill.

    January 14, 2010 01:15 pm at 1:15 pm |
  6. FED UP

    The unions are making laws, while the American public is shut out of this process. This is so wrong and I am so angry. I would love to hear how the annoited one justifies this to those of us who work, pay taxes, but are not in unions. I'm sure his answer will be "too bad, we won, you lost, screw you" as usual. The revolution was started because of taxation without representation. That totally pales in comparison to this BS. The second American revolution is coming....

    January 14, 2010 01:19 pm at 1:19 pm |
  7. Henry Miller, Libertarian

    "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."

    This smells like that Ben Nelson Nebraska deal–bribe one group with money stolen from someone else.

    Wake up, people! This whole health care thing is nothing more than a huge pay-off to people and organisations that can be counted on to vote for Democrats. It doesn't matter in the slightest to Pelosi, Reid, and Obama that their health care welfare scheme will drive up your health care costs and your taxes, and hurt the quality of your health care services.

    The only people politicians truly represent are those who contribute a lot to their campaigns. Just follow the money trail: Who's getting protected by this latest back-room deal? Unions. Who stands to lose? Nameless, faceless, mere citizens who will have to pay more to cover what union members and residents of Nebraska will get for free until 2017.

    January 14, 2010 01:21 pm at 1:21 pm |
  8. Dutch the Great

    If you're a middle-class working American, there's no need for you to have a Cadillac plan unless you can afford the out of pocket expenses. I'm all for taxing the top 2%.

    January 14, 2010 01:21 pm at 1:21 pm |
  9. Hillbillicus

    Hmmm.... Aren't folks making between 100k and 200k a year considered wealthy?

    January 14, 2010 01:22 pm at 1:22 pm |
  10. all the news that's fit to omit

    What a disgrace, what happened to the shared sacrifice?

    My bad, it's just like nobody will see their taxes going up, the healthcare will be on C-SPAN, we have saved or created 2 million jobs since we passed the stimulus and unemployment will NOT go above 8 percent.

    Lie, lies and more lies.

    Dodd was number one, Kennedy's seat is number two, then Reid and some others and 2012, THE GUTLESS, LYING COWARD IN CHIEF.

    January 14, 2010 01:24 pm at 1:24 pm |
  11. Rick CT

    Good to see that, true to one of St. Barack's key promises, this is being done out in the open so we can all assess the impact of this $trillion bill well before we become subject to it. NOT!

    January 14, 2010 01:24 pm at 1:24 pm |
  12. Monster Zero

    I hope America is watching to see who and what makes up and controls the whims of the Democratic party...

    Unions = NO WORK and NO JOBS! If the lessons learned with the collapse of our auto industry due to the legacy carry of the UAW has not sunk in yet then just keep voting for Democratic candidates.

    January 14, 2010 01:24 pm at 1:24 pm |
  13. aware

    Go for it losers – kill insentive and jobs and watch dumb Obama and his minions sink! :)

    January 14, 2010 01:24 pm at 1:24 pm |
  14. Bob

    Well its clear the big labor carries a huge stick with this WH. Disgusting. I just love the transparency and openness that was promised during Obama's campaign. Unreal.

    January 14, 2010 01:25 pm at 1:25 pm |
  15. gary

    Have you libtard dimocrats heard that this 'healthcare reform' bill will require everyone to have health insurance or they can be fined or imprisoned? Is that freedom and liberty which our country is based on? You're party is going in the tank very fast with 2010 making 1994 look like a teaparty (pun intended), Obama is so incompetent with his proposals that the dimocrats will lose both houses this year and he will not be re-elected in 2012. Yes, we are the party of NO! No more new taxes. No more government interference in our lives. No more socialist agendas from the far left. You libtards are making your bed and now you're going to have to sleep in it. The people who decide elections are the independents and most of them are fed up with this empty suit from the corrupt Chicago political machine.

    January 14, 2010 01:25 pm at 1:25 pm |
  16. aware

    Oops! Go for it losers – kill incentive and jobs and watch dumb Obama and his minions sink! :)

    January 14, 2010 01:26 pm at 1:26 pm |
  17. Enough is Enought

    It makes me sick when I hear the term healthcare reform, its really just a new entitlement. The trial lawyers and the unions are both foul blood sucking leaches on the economy yet their interests seem to come before those of the American taxpayers in all the proposals being discussed. The article wrongly says immigration issues will have no impact on the costs. Has any one figured the cost of adding 12 million illegals after Obama makes them citizens.

    January 14, 2010 01:28 pm at 1:28 pm |
  18. nomorepoliticsplease

    "Because these issues have no impact on cost of the bill, details on these can be worked out harseparately."

    wha? and we have the nerve to call people stupid beacause SOMEBODY added an "E" to Massachusetts?

    January 14, 2010 01:29 pm at 1:29 pm |
  19. Capt. Snarky

    Hmmm – I smell another "sweetheart deal" for the labor unions to get them on board. Can't wait to see this one in the light of day...................

    January 14, 2010 01:29 pm at 1:29 pm |
  20. Dar

    The unions can put their two cents in but the republican's cant even sit in on the meeting?????????????????

    So now the unions are telling Odumbo how they want this to go and the dip says, okay union brothers, since you helped me steal the election I will throw you a bone too. And IM sure it is a big bone too.

    You dumb ass Dems wanted a transparent goverment, you got it, hes showing you how to brib, lie,cheat and destroy our America. Right in front of your blind eyes, and I do mean blind, you have to be blind not to see what is going on.

    Odumbo is a punk, hes up to no good and you dumb asses like it.

    2010/2012 Change is coming

    January 14, 2010 01:32 pm at 1:32 pm |
  21. Barry In Las Vegas

    No surprise here. Of course Obama and the Dems caved to the unions. They are owned by them and dance to the unions toon whle the majority of the working class get stuck with the bill.

    January 14, 2010 01:32 pm at 1:32 pm |
  22. Ready for 2012

    Tax 'em!!!!!

    January 14, 2010 01:33 pm at 1:33 pm |
  23. Greg

    I'm so fed up with how these deals continue to get cut on this health care plan.

    January 14, 2010 01:33 pm at 1:33 pm |
  24. TruthHurts

    Ah don't worry about union workers, the way obama is handling the economy, you will soon be out of work anyway.

    January 14, 2010 01:33 pm at 1:33 pm |
  25. shmeckell

    There are a lot of other people in the work force that are not in unions that gave up good pay for better benefits. It just seems funny to me that the unions get to negotiate for their own best interests and not the rest of the country's.

    Special interest groups are what is wrong with this country. But I guess you can’t blame them because if all employers where honest and fair, there would not be any unions. It is just really frustrating to see the groups that start out to combat the evils in this world turn as evil as the ones they set out to fight.

    January 14, 2010 01:33 pm at 1:33 pm |
1 2 3