Johanns: Latest back-room deal unfair to many

WASHINGTON -- Senator Mike Johanns today criticized the latest back-room deal to emerge from the health care negotiations between Democrats in the Senate and House of Representatives. A deal has reportedly been reached to exempt union employees from a proposed 'Cadillac tax'--a 40 percent tax on high-cost insurance plans put in place to help pay for the $2.5 trillion bill--that would weigh non-union workers with a disproportionate burden of health care costs.

"It is remarkable to me that despite the outcry over this bill and its back-room deals, Democrats start the new year with another special carve-out to get this limping bill across the finish line," Johanns said. "I don't know how my colleagues can agree to this deal and then turn around and claim this is reform when insurance costs will go up for so many non-union Americans. In our right-to-work state, this special deal would literally lead to two workers doing the exact same job side by side, and the worker without a union card paying up to 40 percent more for health insurance. There is a growing disconnect between what the American people want and what this piecemeal bill of special carve-outs gives them."

The deal would change the structure of health insurance tax plans:

* The original bill would place a 40 percent excise tax on all insurance plans at $23,000 and higher for families and $8,500 and higher for individuals.

* The new deal exempts policies covering workers in collective bargaining agreements, state and local workers and members of voluntary employee benefit associations through Dec. 31, 2017.

* Additionally, the threshold for the tax is raised to $24,000 for family plans and $8,900 for individuals.

* The Congressional Budget Office (CBO) originally projected the 'Cadillac tax' would generate $149 billion in revenue. The new deal generates $60 billion less. That money will now need to be replaced with other tax increases, more Medicare cuts, or more federal debt.

* CBO projects much of this 40 percent tax would be passed onto consumers.

* CBO: "The legislation would impose several new fees on firms in the health sector. New fees would be imposed on providers of health insurance and on manufacturers and importers of medical devices. Both of those fees would be largely passed through to consumers in the form of higher premiums for private coverage." (CBO Director Douglas Elmendorf, Letter to Sen. Bayh, p. 15-16, 11.30.09)

Labor statistics for Nebraska:

* In 2008, 8.3 percent of Nebraska workers belonged to a union; 10.7 percent of Nebraska workers were represented by a union. (Bureau of Labor Statistics)

* The latter number includes members of a labor union or an employee association similar to a union, as well as workers who report to no union affiliation but whose jobs are covered by a union or an employee association contract.

* Nebraska is one of 22 states with a "right-to-work" law, which states a person cannot be denied employment on the basis of union membership.