Unions poised to win delay of ObamaCare tax in budget deal
By Elise Viebeck - 10/14/13 05:25 PM ET
Labor unions are poised to score the delay of an ObamaCare tax in the bipartisan budget deal emerging in the Senate.
The bargain under negotiation would make small adjustments to the healthcare law, including delaying the law's reinsurance fee for one year. The three-year tax is meant to generate revenue that will stabilize premiums on the individual market as sick patients enter the risk pool.
The tax applies to all group health plans, but unions argue it will raise their healthcare costs while providing them no benefit.
The reinsurance tax figured prominently in discussions at a recent AFL-CIO convention, where workers passed a resolution demanding changes to ObamaCare.
The White House recently denied labor's top priority on ObamaCare, ruling that union health plans are not eligible for the new subsidies because they are already helped by the tax code.
Democrats could be pushing to delay the reinsurance fee for one year as an olive branch after that apparent slight, though it could also create trouble for insurers on the marketplaces.
The possible Senate deal would raise the nation's debt ceiling until mid-February, immediately reopen the government and provide funding until Jan. 15.
It remains to be seen if House Republicans will accept a package that does little to thwart ObamaCare.
The emerging Senate deal defies several expectations when it comes to the healthcare law.
It does nothing to delay or end a new tax on medical devices, for example — a move that appeared to be gaining momentum earlier in the week.
The 2.3 percent tax, which has opposition in both parties, is expected to generate about $30 billion in revenue for ObamaCare over the next 10 years.
Supporters say the fee is fair because the device industry will benefit from a wider customer base under the healthcare law.
But device makers say their tax will cut jobs and stymie innovation, and this argument has gained traction on Capitol Hill.
A bill to repeal the device tax has more than 260 co-sponsors in the House, and 30 Democratic senators opposed the fee alongside their GOP colleagues in a symbolic vote earlier this year.
Democrats are considering including a provision in the emerging deal to require income verification for people receiving federal discounts on healthcare coverage.
But a Democratic aide characterized that reform as a "nothing-burger" because it would only enforce existing law.