Obamacare: Good For Workers, Bad For Unions

Dave Weigel sent an interesting Tweet this afternoon.

It's been a tough couple of months for labor unions and the Affordable Care Act. The AFL-CIO passed a resolution at its convention earlier this month complaining about several of the law's provisions. The head of the Laborers International Union of North America said the law should be repealed if it isn't modified to the unions' liking.

Most of the Democratic Party's liberal coalition is quite eager for implementation of the new health care law, and Obamacare is pretty clearly beneficial to the sort of people who join labor unions: low- and middle-income workers who stand to gain bigger subsidies and better access to health insurance under the law.

But the unions are resistant. Here are five reasons why:

• Obamacare discourages the sort of high-end health plans some unions have negotiated. Starting in 2018, the law imposes an excise tax on the most expensive health plans, as a way to both discourage high health care spending and raise revenue to finance the law. A lot of the "Cadillac" plans that will be subject to this tax are high-end ones that labor unions have negotiated for their members.
• Obamacare is financed in part through taxes on health insurance premiums. Officially, these are three new "fees" on group health insurance plans, but substantively they are taxes. TriNet, which provides health benefit services for Business Insider's employees (including me) estimates that these taxes are adding 2.8% to their average health plan premium next year. So, if you already have a health plan, you have reason to worry that Obamacare could make it more expensive.
• Obamacare will undermine union-run Taft-Hartley multiemployer plans. This is at the center of LIUNA's complaint: Employers who currently participate in these plans are likely to drop out and give their employees cash to buy plans in the Obamacare exchanges instead. The unions claim that this is bad for the workers who currently enroll in Taft-Hartley plans. I don't buy that; the reason Taft-Hartley plans are expected to fall out of favor is that many current participants in those plans will become eligible for much larger subsidies if they buy in the exchanges. But whatever the impact on union members, the demise of Taft-Hartley plans is clearly bad for the union leaders who run them.
• Obamacare will make non-union workers better off. Access to exchange subsidies is good for union workers, but it's even better for non-union workers, who are more likely to lack access to health care through work currently. This win-win for workers will make it harder for unions to organize workplaces. As Avik Roy points out, access to a Taft-Hartley health plan is a key selling point to workers considering affiliating with certain unions. Losing that advantage of union membership may make workers less keen on joining a union.
• Universal health care will reduce the importance of collective bargaining. I noted last week that decoupling health insurance from work will reduce employers' power over workers, by making it easier to demand a raise or quit your job without fear of losing your health insurance. Since a key purpose of collective bargaining is to press employers to make good on obligations to their workers, shifting some of those obligations away from employers toward the government makes unions less important and powerful.

While these are rational reasons for unions (or at least union leaders) to be wary of Obamacare, none are really good substantive policy objections to the law. The best objection is to the taxes on plan premiums, but the new benefits the law provides have to be financed somehow. Don't confuse some unions' parochial concerns about Obamacare for a reason to think the law is a problem for workers broadly.