Asymmetrical Information - Megan McArdle

04.17.13

Is Labor Turning Against Obamacare?

A union is calling for the law's repeal

I've been hearing for a while that unions are becoming increasingly disenchanted with Obamacare.  Multi-employer union health plans cover an estimated one in six private sector workers, so they're a big enough market presence to worry about.  And as with pensions and other union benefits, the structure of multi-employer plans is unique enough that they need special rules to cover them.  For example, employees are not given health insurance based on the number of hours a week they work; instead, you qualify by working a certain number of hours in the quarter.  

Some unions are worried that Obamacare is taking away some of the tools they use to control utilization and costs.  There's also a lot of concern that these plans are going to get hit by the "Cadillac Tax" on generous health benefits.  The unions are unhappy about this, and not just because health insurance is tax advantaged; they view the generosity of their benefits as both an organizing tool, and a form of social engineering.  It takes the same number of hours worked to qualify for health benefits whether you're a single or a family, and the unions like it that way.  They're fairly socially conservative organizations.  And besides, the spouses like the benefits, which keeps 'em in the union.  

Obamacare did very little to accomodate the multi-employer plans.  Perhaps that was due to be hashed out in the final bill, but of course, we didn't get a final bill, because the election of Scott Brown threw everything into chaos.  Instead they hastily passed what was basically a draft bill, which had done virtually nothing about the MEPs.  The unions supported it anyway, undoubtedly because they were assured by the Obama administration that the problems would be fixed later.  From what I understand, they still haven't been.

But until now there hasn't been an outright break, just a lot of behind-the-scenes grousing.  That changed today, as the 22,000 member Roofer's union has just called for Obamacare's repeal.

By itself, that doesn't mean much.  The Roofers are a pretty small union, as unions go.  And they're really in a pinch with Obamacare, because most roofing firms are small--too small to trigger Obamacare's coverage requirements.  Which means that Obamacare may put union firms at an even bigger disadvantage against open shops.  This may simply be one small group of angry people.

On the other hand, coming out against a Democratic president on a major piece of safety legislation--a bill that was the crown jewel of said president's first term--is a pretty radical move for a trade union.  I'm frankly surprised it happened at all.  If other unions follow suit--admittedly a big if--that's going to put Democratic legislators in an uncomfortable spot.  This is the first time that I've actually thought there might be a chance that the GOP could force a repeal of Obamacare through congress--not because the roofers are so important by themselves, but because they could be a harbinger of a cracking coalition.  

To be sure, that remains a very long shot.  But the odds are a little shorter than they were last week.