AFL-CIO Statement on the Senate Health Care Bill

Not worthy of our support without changes

Working people have been fighting for health care reform in the United States for over a century. Despite the challenges to getting a good bill, we are not about to give up now.

Today, our country stands alone in the developed world as the only nation not to provide comprehensive health care to all her people. It is a distinction without honor or even common sense.

Sadly, in the U.S. Senate, there are enough defenders of the health care industrial complex to undermine, delay, or - they hope - defeat the best chance at reform we have ever had. They are defenders of a status quo which kills 45,000 people each year for lack of health care coverage and caused 62 percent of all bankruptcies in 2007 alone.

The House has passed its version of health care reform, HR 3962. While the Senate bill contains some important provisions in the House bill, there are significant deficiencies. We would like to see the Senate produce a bill we can rally behind, AFL-CIO President Richard Trumka said in a statement released today:

"But for this health care bill to be worthy of the support of working men and women, substantial changes must be made. The AFL-CIO intends to fight on behalf of all working families to make those changes and win health care reform that is deserving of the name.

"The absolute refusal of Republicans in the Senate to support health care reform and the hijacking of the bill by defenders of the insurance industry have brought us a Senate bill that is inadequate: It is too kind to the insurance industry."

The Senate's health care benefits tax on the middle class

Whereas the House bill would raise revenue with a tiny surtax on millionaires, the Senate would have middle class families pay a tax on their current health benefits. If you're lucky enough to have health insurance through work, the Senate bill would tax you on it as if it was income.

Not only is this a tax increase on persons making less than $250,000 a year - something candidate Obama promised us he would not allow as president - it will encourage many employers to stop offering health insurance all together rather than pay increased payroll taxes.

To add insult to injury, unions have for years now had to sacrifice wage increases in contract negotiations just to keep health insurance coverage at rates workers can afford. Now the Senate would tax us on those benefits.

It doesn't have to be this way - the House bill, HR 3962, does not contain a health care benefits tax. Not only is it bad policy for the Senate to increase taxes on middle class families, it is terrible politics.

The Senate's individual mandate is a bailout for private insurance companies

The Senate bill will require every American to buy health insurance from a private health insurance monopoly. Absent the public option, the individual mandate to buy coverage will force you to become a customer of Blue Cross Blue Shield or one of the few other private health insurance providers - companies which enjoy an exemption from federal anti-trust laws.

The Senate bill would provide 30 million new customers for private insurance companies while doing nothing to constrain costs and leaving private health insurance companies unchecked. The subsidies to help people afford to buy coverage, while necessary for low income individuals and families, will be in effect a massive transfer of wealth to private insurance companies.

Genuine reform requires something different

Genuine health care reform must bring down health costs, hold insurance companies accountable, assure that Americans can get the health care they need and be financed fairly.

• That's why we are championing a public health insurance option: It is the only way to break the stranglehold of the insurance industry over consumers that has led to double digit premium increases virtually every year.
• Employers must pay their fair share.
• And the benefits of hard-working Americans cannot be taxed to pay for health care reform -- that's no way to rein in insurance companies and it's the wrong way to pay for health care reform.

The Senate bill does some good things: minimum benefit standards, help for low income individuals and families, an end to the denial of care based on pre-existing conditions, and help for seniors receiving prescription drug coverage, says Trumka.

"But because it bends toward the insurance industry, the Senate bill will not check costs in the short term, and its financing asks working people and the country to pay the price, even as benefits are cut.

"The House bill is the model for genuine health care reform. Working people cannot accept anything less than real reform."