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Unions fail to get fix from White House on key 'Obamacare' concern

U.S. President Barack Obama speaks about health insurance reform during a visit to Portland, Maine April 1, 2010. REUTERS/Kevin Lamarque
U.S. President Barack Obama speaks about health insurance reform during a visit to Portland, Maine April 1, 2010. REUTERS/Kevin Lamarque

By Roberta Rampton

WASHINGTON (Reuters) - Top labor leaders left the White House on Friday after an hour-long meeting with President Barack Obama, still looking for a way to address concerns that "Obamacare" will hurt their members' healthcare plans.

The dispute with unions - traditional allies of Democrats - as the Obama administration begins to roll out Obama's signature healthcare reforms is providing political ammunition for Republicans who want to defund or repeal the law.

Striding down the White House driveway, Richard Trumka and six other union officials declined to answer detailed questions from reporters.

"We're continuing to work on problem-solving," said Trumka, president of the AFL-CIO, the umbrella organization for 57 member unions representing more than 13 million workers.

Trumka said he hoped further discussions would yield solutions "in the next week," but would go no further.

Earlier this week, AFL-CIO members passed a resolution calling for significant changes to the healthcare law, stopping short of asking for its repeal, but exposing the rift between the labor movement and the Obama administration.

Unions say the law is unfair because lower-income members who belong to multi-employer healthcare plans common in the retail, construction and service industries will not be eligible for subsidies other low-earning workers will qualify for when buying health insurance on state exchanges beginning on October 1.

"We don't want it repealed, we want it fixed, fixed, fixed," said Terry O'Sullivan, president of the Laborers International Union of North America, in a speech at the union's convention in Los Angeles on Wednesday.

"But if the Affordable Care Act is not fixed ... then I believe it needs to be repealed," he said.

NO DOUBLE-DIPPING

Shortly after Friday's White House meeting, the Treasury Department issued a letter that confirmed that people in multi-employer healthcare plans could not receive the Obamacare tax credits to help cover the cost of premiums.

The letter was addressed to Senator Orrin Hatch, the top Republican on the Finance Committee, who argued earlier this week that unions should not get special treatment under the law because members are not taxed on the contributions their employers make on their behalf.

"Giving union workers exchange subsidies in addition to the income tax exclusion would be 'double dipping,'" Hatch said.

Hatch also said he was opposed to the idea of making it easier for the multi-employer plans to be moved on to healthcare exchanges.

But a senior administration official said that possibility was still being explored.

"The administration will work with multi-employer plans and other non-profit plans and encourage them to offer coverage through the marketplace," the official said, offering no details about how that might work.

The process would likely be complicated, said Timothy Jost, an expert on healthcare regulation at Washington and Lee University's School of Law.

"They would have to be licensed as insurance companies and be open to anyone who wanted to purchase, and they could not accept contributions from employers," Jost said.

Healthcare exchanges, set to open on October 1, are trying to clear a raft of hurdles, both technical and political.

Republicans have said they want to demand concessions on the healthcare law as a condition for averting a government shutdown and increasing the government's debt limit.

The conflict between unions and the administration plays into the political fight. On Friday, the Senate Republican Conference sent an email to reporters trumpeting a dozen links to articles about unions' Obamacare complaints.

"You want to have all the allies you can," said Henry Aaron, a healthcare expert at the Brookings Institution think tank, who is also on the executive board of the healthcare exchange for the District of Columbia.

"Not having the unions with you is not good news, from that standpoint," Aaron said.

(Additional reporting by Amanda Becker and Lewis Krauskopf; Editing by Peter Cooney)

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