Are unions getting a ‘disproportionate’ break from the health care law?

at 06:00 AM ET, 03/22/2011


(J. Scott Applewhite - AP)

“Two and a half million Americans, almost half of those union workers, have been given a waiver that they don’t have to live under this health care law.”

— Sen. John. Barrasso (R-Wyo.), March 21, 2011

RELATED POSTS

The first anniversary of passage of the health-care law has led to a flurry of bogus claims both for and against what detractors called “Obamacare.” We have looked at a number of these claims in our last two articles. But when we heard Sen. John Barrasso on MSNBC’s “Morning Joe” show Monday, we had to do just one more, since his comments echoed a recurrent GOP theme.

Barrasso’s statement is interesting because the first part is technically correct. But he is using a relatively narrow issue to make a broader point about what he thinks are the failures of the law — and that could mislead people who are not well-versed in the intricacies of the health-care debate.

Moreover, the reference to “union workers” is intended to put a nefarious cast on the process, suggesting that political supporters of Obama are getting a special break from his most prized legislative achievement.

The Facts

The new law phases out bare-bones health insurance, which can quickly run out of benefits because of low annual coverage limits, known in the trade as “mini-meds.” By 2014, provisions will take effect that require most employers either to offer their workers more complete coverage or to let those workers buy insurance through new insurance marketplaces, called exchanges.

But fast-food companies such as McDonalds and small businesses complained that the interim standards would force them to drop their health plans — or boost premiums. Although the Obama administration is not in favor of mini-meds, which include high deductibles and low annual caps on coverage, it responded by saying it would show flexibility by issuing waivers. It would be a mistake, administration officials said, to temporarily boost the ranks of uninsured because of provisions in a law intended to expand health insurance coverage.

To date, some 1,000 waivers have been issued, to companies ranging with just a handful of employees to major businesses. All told, about 2.6 million people are in plans that have received waivers, at least for this year, from the new law’s initial requirements.

Steven Larsen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services, told a congressional hearing last week that waivers affect fewer than 2 percent of all workers with health insurance.

He added that more than 94 percent of the waivers have been granted to health plans that are employer-based.

“Of the waivers approved, 41 percent were to self-insured employer plans, 31 percent to HRAs [employer-funded group health plans that reimburse for expenses], 23 percent to Taft-Hartley plans — these are employer plans governed by collective bargaining agreements — 3 percent to health insurance issuers,” Larsen said. “Only 2 percent of waivers have been granted to union plans.”

Taft-Hartley plans cover union workers, though they are managed jointly by employer and union representatives (and are often funded by employers). The number of employees covered by union plans and Taft-Hartley plans that received waivers adds up to almost 1.2 million people.

Emily Lawrimore, a spokeswoman for Barrasso, pointed to the statistic as evidence for the senator’s statement. “That number is ‘almost half,’ ” she said. “Unions that get a waiver from Obamacare in fact ‘don’t have to live under this health care law.’ ” She noted that The New York Times this week suggested “the need for waivers is likely to continue.”

“A waiver is a waiver,” Lawrimore said, and “the fact is that they, by providing waivers, are admitting their law doesn’t work.” She added that “a disproportionately large percentage of the organizations receiving waivers have been unions and other political allies of the current administration.”

But the facts don’t back Barrasso’s innuendo, as spelled out by Lawrimore. First of all, one of the fiercest opponents of Obama’s health care push was the National Restaurant Association, but waivers were granted to McDonald’s, Jack in the Box and other fast-food operations. Small businesses, another major foe, also received waivers.

Moreover, it would make sense to say unions received a “disproportionate share” only if significant numbers of mini-med employers were denied waivers while unions received them. But 2.6 million people appears to cover the universe of all mini-med policy holders in the United States. An analyst at the conservative National Center for Policy Analysis told a Senate panel in December that the total number of mini-med policy holders was 1 to 2 million people. We can’t find any other recent estimates that exceeded 2 million.

In other words, just about every plan which wanted a waiver appears to have gotten one. In fact, Larsen testified at a Feb. 16 congressional hearing that 14 percent of those denied waivers were union-related plans, compared to 3 percent of all applying — further undercutting the notion of tilting toward unions.

The Pinocchio Test

Barrasso’s statement is misleading and lacks context, even if his numbers are right in the beginning. Nearly half of the workers affected may be in unions, but there is no evidence of favoritism toward unions—or any other group. The waivers affect less than 2 percent of Americans with health insurance. By 2014, if not sooner, the waivers will expire and the companies and workers will have to live under the health care law, like everyone else.

Two Pinocchios

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4:30 PM UPDATE:

In response to the number of people who have written that since unions make up about 10 percent of all workers, therefore it is disproportionate that they receive nearly 50 percent of the waivers...I am sorry but that is an apples-to-oranges comparison. A real apples-to-apples example of “disproportionate” would be if 1/4 of the people in mini-med plans were union-related but unions got 1/2 of the waivers.

(Here’s a simplified illustration: third graders might only be 7 percent of the population overall but they will get 50 percent of the slots in the local elementary school play because they make up 50 percent of the students eligible to be in a play, which is limited to just 3rd and 4th graders. Would it make sense to say they got a disproportionate number of the acting roles simply because they are a much smaller part of the overall population?)

Unfortunately, there does not appear to be much data about what kinds of workers get these kinds of bare-bones plans, though clearly they are more likely to be low-wage, unionized workers.

As the article stated, the best previous estimates of how many people were covered by mini-med plans was around 2 million. (The data is not very precise, but the source I cite above is a conservative think tank.) So 2.6 million people getting waivers suggests that just about everyone in a mini-med plan who wanted to get a waiver got one. Moreover, according to HHS data, union plans were more likely to be rejected for a waiver than a non-union plan.

Hence, there is no evidence of a disproportionate share going to unions. But if anyone can find an accurate breakdown of which types of workers are in these plans please send it to me.

 
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    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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