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AARP, AFL-CIO Boost House Health Plan That Taxes Rich, Not Middle Class

The centrist lobbying powerhouse for the elderly, the American Association for Retired Persons (AARP), is scheduled to endorse the House health care bill despite its possibly flawed public option.
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Today, the centrist lobbying powerhouse for the elderly, the American Association for Retired Persons (AARP), is scheduled to endorse the House health care bill despite its possibly flawed public option. Still, the House bill is winning high marks from a growing number of influential progressives for helping make health care more affordable. Indeed, a final vote on the House bill could take place as soon as this weekend.

At the same time, the AFL-CIO is coming out swinging with a tough series of newspaper ads criticizing the Senate bill's 40% excise taxes on insurers offering high cost plans. That's a provision likely to add significantly to middle-class families' costs through higher taxes or outlays, according to unions and the Congressional Joint Committee on Taxation.

As I reported in In These Times, labor unions, joined with other progressive organizations like Health Care for America Now, are pushing to strengthen the legislation when the bills come to floor votes, and they're also focusing their efforts on ensuring that midde-class families and union members aren't slammed by a whopping 40% tax on insurers offering so-called Cadillac plans.

That's what the Senate bill does, in essence, by passing along the costs to workers, while the House version seeks to impose a surtax on America's wealthiest families, the top 0.3%: taxing a portion of $500,000 for individuals and $1 million for couples. Already, Republicans are gearing up anti-tax rhetoric that could spook moderate Senate Democrats facing re-election.

"The biggest gulf between the House and Senate versions are the financing pieces: how to pay for it," observes Alan Charney, the program director of USAction, the lead grassroots organization in the Health Care for America Now (HCAN) coalition, with its 1,000 local and national groups, including labor organizations.

So two extremely influential groups are adding their voices to the support building for the House plan. The main supporters of the Senate taxation plan include the President's economic advisers and some influential Washington bloggers on health care, including the Washington Post's Ezra Klein. But the respected liberal Washington Post columnist Harold Meyerson also added his support for the House measure on Wednesday, observing the fine print and sweeping changes in the legislation that make the House bill more affordable for working families.

He points out:

The health-care reform bills emerging from the House and Senate, when melded and enacted, will constitute an epochal achievement: the near-universal provision of medical care to the American people. But the House version is clearly the more epochal, as the health coverage it provides is more universal, chiefly because it's more affordable.

For families who buy their insurance on the exchanges that both bills establish, for instance, the House bill includes more generous subsidies -- on average, $1,000 more, according to the Congressional Budget Office. The House bill also offers a lot more assistance to Medicare recipients by reducing the cost of their prescriptions. While the bill that emerged from the Senate Finance Committee renews the Bush administration's mega-bucks gift to the drug companies by continuing to prohibit Medicare from negotiating drug prices with them, the House bill authorizes those negotiations...

The House bill is not only better public policy than the Senate's, it is also better Democratic politics. Seniors always constitute a disproportionate share of midterm electorates, and Democrats concerned about next year's congressional contests would do themselves a major favor by passing a bill that reduced the costs of seniors' medications.

One lesson from Tuesday's election is that candidates who spurned the President and health care reform, as in Virginia, dampened turnout among the Democratic base. Governor Corzine, although he lost, did better than expected despite his low approval ratings and allegations swirling around his administration. And the eloquent The Hill columnist Brent Budowsky wrote in a column, "Come Home, Mr. President":

With the 2009 elections over, it is time to air a very significant debate now under way among high-level Democrats.

My view, held by a growing number of Democrats, is this: The president should come home to the first principles of his campaign and act more in the tradition of great change presidents such as Theodore Roosevelt, Woodrow Wilson, Franklin Roosevelt and John Kennedy.

The president should be more engaged in the aggressive battles for real change, more activist with Democrats in Congress, more clear about the first principles of his presidency and more bold in appealing to voters to rise up and demand change as he promised in his speech accepting the Democratic nomination for president...

So in keeping with the spirit of reform that propelled Obama to the White House, it could well be smart politics that the AFL-CIO is kicking off today a national week of action that aims to inspire a million of its members to write hand-written letters and phone calls favoring the House version of the legislation.

As an AFL-CIO statement declared:

As part of the national week of action, the AFL-CIO is also running ads in Washington newspapers including Politico, Roll Call, The Hill and The Washington Post to highlight the House health care legislation as a model for reform. The House bill includes a public health insurance option to lower costs for all and keep insurance companies honest. It covers 96 percent of Americans, is entirely paid for and reduces the deficit. It includes a surtax on the very wealthy who benefited so richly from the Bush tax cuts. And it guarantees that employers pay their fair share by requiring them to provide insurance or pay into a common fund so responsible employers don't have to pick up the tab for freeloaders.

"Thursday, November 5, will be the kickoff of the largest mobilization to generate phone calls to members of Congress the labor movement has ever undertaken," said AFL-CIO president Richard Trumka. "We are closer than ever to achieving national health care reform and providing relief for working families, and we are committed to driving it across the finish line."

The ad features a woman telcom worker and two-time cancer survivor asking:

"I've worked hard all my life to pay my bills. Why does Congress want to tax my benefits?"


The AARP, despites its bipartisan membership and ties to the insurance industry, actually shares similar goals with the unions by backing the House bill. As noted by the expert reformer and author of Profit-Driven Medicine, Maggie Mahar of the Century Foundation:

Many reformers have been uncertain as to whether they could rely on the Association of Retired Persons (AARP) to support progressive health care reform. After all, AARP has close ties to the insurance industry.

But this evening, the Associated Press (AP) reported that "In a coup for House Democrats, AARP will endorse sweeping health care overhaul legislation headed for a history-making floor vote

"An announcement from the 40-million member group is expected Thursday [tomorrow], said officials with knowledge of the group's decision. They spoke on condition of anonymity because the endorsement is not official yet.

"Backing the 10-year, $1.2 trillion House bill is a tricky move for AARP. Many retirees are concerned about cuts in Medicare payments to medical providers, which will be used to finance an expansion of health insurance coverage to millions of working families who now lack it. Also, AARP says its membership is about evenly divided among Democrats, Republicans and independents, meaning its endorsement in today's highly politicized atmosphere could anger many members.

"Floor votes on the House bill could come as early as this weekend" the AP report notes...

"Last-minute changes to the legislation, released late Tuesday night, started a 72-hour legislative clock and cleared the way for votes as early as Saturday."

And even as disputes over scope of reform continue prior to the final votes in the House and Senate, Mahar, among others, has sought to remind us just how far we've come and the value of key provisions in the pending legislation:

What Has Been Accomplished

What is astounding is that this Congress has made as much progress as it has. We may have a new administration in the White House, but we do not have a brand-new group on the Hill. The majority of our legislators are moderates; many are conservatives. Nevertheless, a sufficient number have found the will to stand up and back changes that would make health care affordable for millions of poor, working-class and middle-class Americans.

For example, under the House bill, a family of three making $32,000 a year would pay just $1,360 in annual premiums for good, comprehensive coverage [for non-workplace purchased plans]; under the Senate Finance Committee bill, the same family would be asked to lay out only $2,013. Today, without, if that family tried to buy insurance, it would find that the average plan costs $13,500. For this household, the current legislation makes all of the difference.

Too often, the press suggests that such a family would be expected to pay $10,000 out-of-pocket to cover co-pays and deductibles. That just isn't true. Even if the entire family were in an auto accident and racked up $200,000 in medical bills, at their income level, the House bill caps out-of-pocket expenses at $2,000 a year. Under the Senate Finance bill, the family would have to pay $4,000. Moreover, under both bills, there are no co-pays for primary care. Even private insurers cannot put a $25 dollar barrier between a family and preventive care...

Mahar makes a stirring case for progressives to keep prodding Congress to act this year and improve the legislation. Since some parts of the legislation won't take effect until 2013, including the public option, she notes that there will be time to amend the legislation before then, But she does not lose sight of the value that the bills under consideration, despite their imperfections, can offer:

But, we all should recognize that the bills on the table would change the lives of millions of Americans, giving them the security that they don't have today.

Progressives cannot let this opportunity slip through our fingers because we are so busy critiquing the legislation--and arguing with each other. The WSJ online reports that Senate Majority Leader Harry Reid has begun to warn that the Senate may not be able to complete the legislation by the end of this year.

Given all of the criticism he has faced, Reid could be losing heart. After all, conservatives continue to argue that legislators like Reid will be punished at the polls. Congressmen who have been pushing for reform need our encouragement. Progressives should continue to make it clear that the majority of Americans want reform-- and a public option-- even if the legislation is far from perfect.

2010 is an election year. Fearful of losing, some Congressmen will begin to back away from change. It is critical that broad reform legislation is passed this year.