AFL-CIO Vote Slams Obamacare: It Will Drive Up Costs

The AFL-CIO is ramping up pressure on the Obama administration to change parts of the health care overhaul law that could impair benefits for millions of union members.

The nation's largest labor federation approved a strongly worded resolution on Wednesday that says the Affordable Care Act will drive up the costs of union-sponsored health plans to the point that workers and employers are forced to abandon them.

Some individual unions have complained about the law's impact for months, but the resolution marks the first time the AFL-CIO has gone on record embracing that view. It comes from one of the president's major boosters just as the administration is rolling out a multimillion-dollar advertising campaign to encourage Americans to sign up for health care exchanges starting Oct. 1.

Unions were among the most enthusiastic backers of the law when it passed in 2010. The resolution says labor unions still support its overall goals of reducing health costs and bringing coverage to all Americans, but it complains that the law is being implemented in a way that is "highly disruptive" to union plans.

Harold Schaitberger, president of the International Association of Firefighters, said the intent is to "point out the criticisms without being overly caustic."

"There have to be some changes made in the areas that are giving a number of our unions great concern," said Schaitberger, who chaired the committee that hammered out the resolution's language.

The resolution was approved at the AFL-CIO's quadrennial convention in Los Angeles. It claims the new law will increase costs for health plans that are jointly administered by unions and smaller employers in the construction, retail and transportation industries. That could encourage employers to hire fewer union workers or to abandon the health plans altogether and force union members to seek lower quality coverage on the new health exchanges.

Union officials are seeking rule changes that would make their low-income workers eligible for the same types of federal subsidies they could get in the exchanges. They have also suggested rules that would treat their multi-employer plans as qualified exchange plans under the new law.

But the Congressional Research Service issued a memo earlier this year finding that neither change is allowed through rulemaking. The AFL-CIO resolution calls for the law to be amended by Congress if new rules cannot satisfy their concerns.

AFL-CIO President Richard Trumka held meetings at the White House last month in which he and other union leaders pressed the administration to make changes. Trumka has said he is encouraged that the White House is listening, but that no firm proposals have been made.

The White House issued a statement Wednesday saying there is nothing in the Affordable Care Act that changes the law for union plans. The statement said the White House would continue to work with unions and other stakeholders on ways to ensure smooth implementation of the law.

The AFL-CIO resolution was toned down from a draft originally offered by Sean McGarvey, head of the AFL-CIO's Building and Construction Trades Department. The early draft said the AFL-CIO could no longer support the health care law and called for its repeal unless changes were made to protect union multi-employer plans.

Republican critics of the health care law have seized on the union complaints to fuel their push to repeal the law. At the same time, GOP leaders have warned the White House against carving out any special deal for unions.

"We will do whatever is within our power to ensure that the administration does not once again provide a special exemption to unions at the expense of American taxpayers," Michigan Rep. Dave Camp and Utah Sen. Orrin Hatch wrote in a letter this week to Treasury Secretary Jack Lew. Camp is chairman of the House Ways and Means Committee and Hatch is top Republican on the Senate Finance Committee.