Unions unhappy about ‘Cadillac’ tax

WASHINGTON, D.C. - National teachers' unions have been solidly behind health care reform so far, but Education Week reports that they are not so excited about a Senate version that would tax so-called "Cadillac" health plans.

One provision now before the Senate Finance Committee would tax insurance companies and plan administrators that sell high-cost health plans, Education Week reported. That tax revenue would be used to expand access to health care for more individuals — one of the key goals of health care reform.

Insurance companies would likely pass that cost on to school district customers, who then might want to scale back benefits, according to Education Week. Representatives of the National Education Association and American Federation of Teachers say that would be unfair to teachers who have bargained for high benefit levels instead of salary increases.

At this point, "high-cost" is defined as $8,000 or more per year for a single plan and $21,000 or more for family coverage.

Economics experts disagree on whether, if schools scale back benefit plans, they would use some of the savings for pay raises, according to Education Week.

Education Week, "Prospect of Health-Plan Tax Draws Union Opposition," Nov. 17, 2009

Mackinac Center for Public Policy, "Cuts to the Classroom," Nov. 9, 2009