The Obama administration on Monday released a new regulation setting rules for who can keep their current health insurance plans under the law. The regulation gave special consideration to plans negotiated by unions, quickly drawing criticism from conservatives and others, who argue the rules will put small businesses at a competitive disadvantage.
But the new rule is only one of numerous ways the health-care law boosts unions. And since vast portions of the law remain undefined – until bureaucrats fill in the details – further breaks for organized labor are widely expected.For the rule regarding whether people can keep their health plans – known as “grandfathering” in bureacratise – the Department of Health and Human Services ruled that for union-negotiated health plans, companies can change insurance providers but keep their essential plan details intact, or grandfathered. For non-union-negotiated plans, companies can’t change providers – they must stay with their same insurance provider.
Without the ability to choose another company, small businesses would have little leverage to negotiate their rates, probably leading to higher costs, critics say. The alternative is to get a new plan which meets the strict new regulations of the Obama health-care law, which will probably cost more, too.It also hits at a core pledge President Obama made repeatedly in pushing for the law – that people happy with their current health plans could keep them. In fact, the Obama administration now estimates that as many as 51 percent of businesses and 66 percent of small businesses will need new health-care plans by 2013 because of the law.
A second way Obama’s health-care law helps unions is in the so-called “Cadillac” tax that applies to more expensive health-care plans.