WASHINGTON – In a major breakthrough, union leaders bowed Thursday to White House demands for a new tax on high-cost insurance plans as part of landmark health care legislation taking final shape in intensive negotiations. “We are on the doorstep” of success, President Barack Obama said.
The tentative agreement on the tax, which included significant concessions by the administration, was disclosed as leading lawmakers set an informal timetable of today for a compromise on the health care bill that Obama made a top priority in taking office a year ago.
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 drug makers, nursing homes and other health care providers.
The fast-paced events came as senior lawmakers spent parts of a second consecutive day at the White House bargaining over terms of a final compromise, and Obama gave a rousing speech to rank-and-file House Democrats in a late-afternoon appearance in the Capitol complex.
In remarks that look ahead to the fall campaign, Obama said, “If Republicans want to campaign against what we’ve done by standing up for the status quo and by standing up for insurance companies over American families, that is a fight I want to have.”
The president wants legislation to expand health care to millions who lack it, crack down on insurance industry practices such as denial of benefits on the basis of pre-existing medical conditions, and slow the growth of health care costs generally.
The president has told lawmakers he wants the tax on high-cost plans included in the legislation to help rein in costs. But that position courted conflict with labor leaders who fear exposing their membership to higher taxes, as well as with House Democrats who omitted it from the legislation they initially passed.
While not all details were set, it appeared the union leaders had backed down on their outright opposition to a new tax, and the White House had agreed to several concessions to mollify their concerns.
In a significant victory for unions, the 40 percent excise tax would not apply to policies covering workers in collective bargaining agreements, state and local workers and members of voluntary employee benefit associations through Dec. 31, 2017.
Rep. Joe Courtney, D-Conn., and others said the tax would apply to fewer plans than was the case in the Senate-passed bill and would exclude the value of dental and vision coverage. They added it would provide an exemption for residents of states where the cost of health care is particularly high, as well as for employees of high-risk professions.