Labor unions have been crucial to advocating for health care reform across the country, including progressive provisions like the public option. But at the end of the debate, there are unconfirmed but potentially troubling signs that they may be more concerned with protecting their own health benefits and eliminating the excise tax on high-end insurance plans rather than trying to pass a bill with a public option.

Andy Stern of the SEIU told ABC News today that he would be unhappy but satisfied if a trigger were added to the public option:

Key to job creation, he said, is a health care bill. While the SEIU has strongly supported a public option to compete with private insurers, Stern indicated that including a “trigger” that would only establish a public entity down the road, if promised savings don’t materialize, might be acceptable to his union.

“I think it weakens the opportunity to hold down the cost,” Stern said of the trigger concept, the subject of ongoing negotiations in the Senate. “Is it better than doing nothing? Absolutely. Would it be great to add some more subsidies if we’re going to have a trigger? For sure. I mean, the issue really is, will people be able to afford this health care? Will small businesses be able to afford it? And putting some kind of cap on these insurance companies’ behavior is absolutely essential.”

Stern seems to be foregrounding the affordability measures, but the other major union coalition is targeting the excise tax. The AFL-CIO has purchased a two-week ad buy, starting in Washington but eventually going to states with key Senators, calling on Congress not to “tax health care benefits.” This is an allusion to the excise tax, which would tax insurance companies for policies above an $8,500 threshold for individuals and $23,000 for families. The Obama Administration has repeatedly cited the excise tax as an important cost-control measure.

The AFL-CIO in particular has member unions which took expensive health care policies in exchange for wage increases in labor negotiations, and would thus have policies vulnerable to the excise tax, expected to be passed on from the insurance company to the policyholder or employer. There are exemptions to the tax in the bill for certain occupations.

A recent report from the consulting firm Mercer showed that many employers may “raise deductibles, change insurers or scale back coverage” to avoid the excise tax.

The release of a health care ad, at a key moment, which only cites the excise tax among the key policies being decided, may lead some to believe that the labor movement is more interested in deep-sixing the excise tax than other issues like the public option. Would they even be willing to trade away the public option if in exchange they got a raising of the excise tax threshold, or its abolition?

An AFL-CIO spokesman, Eddie Vale, questioned that assumption. “To us the bill needs to have three things, which are same three things we have been saying since day one. 1) public option, 2) don’t tax workers benefits and 3) employer mandate,” Vale told FDL News via email. “So we want, and continue to fight for, all three. The fact that this ad is specifically addressing the tax issue doesn’t imply that we care less about the public option and employer mandate.”

The employer mandate isn’t in the Senate bill at all, replaced with a “free rider” mechanism that could end up being discriminatory toward low-wage workers. And the public option is completely up in the air at this point. When asked if the AFL-CIO would be doing specific ads on those issues down the road, Vale said that the federation didn’t know their plans yet. He pointed me toward Health Care for America Now (the AFL-CIO is a member of that coalition), which he said is doing a lot of work on the public option. “Since the tax impacts workers much more than the many members of that coalition, we wanted to do an additional layer just on that issue.”

With the next few days crucial for the public option, it does not seem, at least to me, that the labor movement in general is agitated about it, or at the very least is more exercised about other elements of reform.

FDL News attempted to contact a few of the AFL-CIO member unions for this story, but received no formal response. The legislative director of AFSCME, the public employees union, was unavailable at press time.

David Dayen

David Dayen