A Reason for Conservatives to Love Obamacare
A rift between labor unions and the White House over coverage through Obamacare might be putting smiles on opponents of the health care law—as well as those antagonistic to unions themselves.
"Unions are panicked about this big time," said Bob Zadek, a business attorney with Buchalter Nemer. "If they can't deliver health care benefits to their members, there may not be much reason to join a union. It's a very big deal."
At issue for the unions—which mostly supported the Patient Protection and Affordable Care Act in the beginning, as well as President Obama's re-election in 2012—are their multi-employer health plans. Often referred to as Taft Hartley plans, they are administered by both unions and employers and cover some 20 million workers in the U.S. and their relatives, even during times of unemployment.
But the cost of the plans will rise under Obamacare as the law extends coverage to dependents up to the age of 26, as well as eliminating lifetime limits on coverage and extending benefits to people with pre-existing illnesses.
Several unions—including the United Food and Commercial Workers International Union, the International Union of Operating Engineers, as well as the United Union of Roofers, Waterproofers and Allied Workers—have expressed concerns that under Obamacare, companies will deem the coverage too expensive and drop it.
(Read more: Union Backers Protest Ohio Right-to-Work Bill)
That would force union members to seek new health care coverage under the state exchanges being set up, mainly because companies won't get tax subsidies for Taft Hartley coverage under Obamacare.
"This creates unstoppable incentives for employers to reduce weekly hours for workers currently on our plans and push them onto the exchanges, where many will pay higher costs for poorer insurance with a more limited network of providers," wrote UFCW president Joe Hansen in an opinion piece on the union's web site. "In other words, they will be forced to change their coverage and quite possibly their doctor. Others will be channeled into Medicaid, where taxpayers must pick up the tab."
That channeling may already be happening, even before the law goes into full effect next year.
"I just ended negotiations between a union and a company over health care benefits," said Marc Bloch, a labor and employment lawyer at Walter & Haverfield in Cleveland, Ohio.
"The union didn't like the plan the company offered, but the company said it would rather drop the plan, and pay the fine that comes with Obamacare," Bloch explained. "They determined it was cheaper to pay the fine than continue with the coverage. I think you're going to see more of that in the future."
Opponents of Obamacare criticize its often-used selling point that the plan will not require anyone to change their current health care coverage—something President Obama said at the AFL-CIO Convention in Pittsburgh 2009. Now, some initial supporters of the plan claim that many workers will in fact end up changing their coverage against their will.
(Read more: Union Says It's Barred from Airline Vote)
"Unfortunately, what also has become increasingly clear with each passing day is that the president's statement to labor in 2009 is simply not true for millions of workers," said Hansen in his commentary.
Bob Zadek said the divide is just one more nail in the coffin for unions.
"Unions don't or can't push for higher wages like they used to," said Zadek. "The cruel hand of the market doesn't allow them to do that anymore. So what's mostly left for union membership is benefits, and if you can't get those, people are going to ask themselves what's the point of joining a union."
'There's Some Hysteria Over This'
But not everyone sees a union retreat over the health plan issue.
"I think there's some hysteria over this right now," said Emily Rosenberg, director of the Labor Education Center at DePaul University.
"A lot still has to happen yet with Obamacare, and unions have to be protective of their members, but I think there's time to work this out," Rosenberg said.
"And unions offer more than just benefits, like security in the work place and better working conditions, so I don't think this should keep union membership down anymore than other problems in organizing," Rosenberg went on to say.
But there does seem to be a major hurdle ahead.
Last month, the president of the 22,000-member United Union of Roofers, Waterproofers and Allied Workers went so far as to issue a statement calling for the full repeal of Obamacare, saying it destroys the "protections" workers now have.
Joe Hansen callled on the White House to change the law by regulatory powers and allow subsidies to be provided for the Taft Hartley plans.
"We'd be open to a legislative fix, but ultimately this is the administration's responsibility. They are leading the regulatory process. It's their signature law," Hanson added in his commentary.
So far, the White House has not said what it would do.
"As mad as they are about this, I don't see the unions trying to kill Obamacare if they don't get what they want," said Marc Bloch.
"Besides, they have no where to turn politically," Bloch added. "Obama really hasn't done much for them, but they've learned that the other guy, meaning, the Republicans, will give them even less."