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  White House Brokers Deal with Unions on Taxing High-Cost Health Plans  

In what multiple reports today call a "breakthrough" in the healthcare reform negotiations, union and labor leaders have reached a deal with Congress and the White House on including a tax on high-cost insurance plans to pay for the healthcare overhaul. The story was featured on the front page of major papers and on one network newscast. ABC World News (1/14, story 7, 0:20, Stephanopoulos) reported on "what appears to be a breakthrough in the final push to pass healthcare reform. The White House now has a tentative deal to tax high-cost health insurance plans, those so-called 'Cadillac' plans. Labor leaders were fighting the tax until the plan was changed, giving union members several years of relief from paying the tax."


        In a front-page story, the Washington Post (1/15, Montgomery, Shear) reports that the agreement "broke the last major logjam blocking enactment of far-reaching healthcare legislation." The "breakthrough" agreement "would exempt union members from a proposed surtax on expensive insurance plans until 2018, five years after the legislation would take effect."


        "The changes would lessen and delay the impact of the tax on workers and would reduce the amount of revenue collected," the New York Times (1/15, A1, Pear, Greenhouse) reports in a front-page story. "Labor leaders hailed the deal and said they were prepared to fight for passage of the legislation."


        The Los Angeles Times (1/15, Hook, Levey) calls the negotiations "intense," but adds that the agreement removed "one of the last obstacles to President Obama's healthcare overhaul, officials said." According to the Times, the deal "would raise the threshold for family plans subject to the tax from $23,000 to $24,000 and exempt the cost of dental and vision plans. It also would postpone the tax's application to healthcare plans negotiated under union contracts."


        The Wall Street Journal (1/15, A3, Meckler, Bendavid, subscription required) notes that the new agreement raises a new problem for Congressional Democrats. The lower revenues expected from the tax must be offset by other sources of revenue. Moreover, Republicans now argue that the delay in the health plan taxes for union workers is unfair to workers not in unions, who will still have to pay the tax starting in 2013.


        After what the AP (1/15, Espo, Hananel) calls a "major breakthrough," President Obama said, "We are on the doorstep" of passing the bill. "Democrats expressed the hope that the agreement would quickly open the way for progress on other key issues where House and Senate-passed bills differ, as well as attempts by the White House to squeeze additional financial concessions from drugmakers, nursing homes and other healthcare providers."


        Politico (1/15, Brown, O'Connor) explains that recent negotiations "had focused on raising the threshold at which the tax on so-called 'Cadillac plans' would kick in -- and the deal increases the threshold from $23,000 a year for a family policy, to $24,000." That "threshold is even higher for certain plans with older workers and women, a move to benefit unions with a high proportion of female membership."


        The Hill (1/15, Bolton, Bogardus, subscription required) reports that labor leaders all "praised the agreement and its main negotiators." Likewise, Roll Call (1/15, Murray, subscription required) notes that "union officials said late Thursday that they expect to bless White House-backed healthcare proposals that have stalled in recent days over organized labor's demands."


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