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Friday, July 19, 2024 | Back issues
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Democrats, Unions Strike Deal on Health Care

WASHINGTON (CN) - Union leaders and congressional Democrats reached an agreement Thursday on taxing expensive health care plans as lawmakers hammered out the final version of the long-fought legislation.

President Obama urged Democratic legislators to continue pushing forward in finalizing a health care bill and addressed concerns that health care might come back to bite them during the next elections.

"I know that some of you have gotten beaten up at home," he said in an address at the Capitol. "But just remember why each of us got into public service in the first place."

The agreement, which weakened the original tax, was announced by lawmakers, union leaders and the Obama administration during the second day of intense negotiations in the White House.

The tax's revenue would help finance coverage for millions of uninsured Americans by taking 40 percent from expensive health packages.

The negotiated agreement would exempt until 2018 policies covering state and local workers, workers in collective bargaining agreements and employees in voluntary benefit programs.

Employer-sponsored plans costing more than $8,900 a year and family plans exceeding $24,000 would be taxed 40 percent, deviating slightly from the original Senate version's tax, which would have encompassed more people by taxing slightly cheaper plans: $8,500 for individuals and $23,000 for families.

The House version does not include a tax on so-called "Cadillac" plans.

The cost thresholds vary slightly. People with high-risk jobs, such as police officers, would be able to buy more expensive plans without facing the heavy tax, and plans including large numbers of women -- because women often face higher premiums -- could also be more expensive without drawing the tax.

Richard Trumka, president of American Federation of Labor and Congress of Industrial Organizations, said the agreement will drop government's predicted health tax revenue from $149 billion over 10 years to $90 billion, the New York Times reported.

"Today we are on the doorstep of accomplishing something that Washington has been talking about since Teddy Roosevelt was president, and that is reforming health care and health insurance here in America," Obama said.

He urged Democrats to be proud of the legislation.

"If Republicans want to campaign against what we've done by standing up for the status quo and for insurance companies over American families and businesses," Obama said, "that is a fight I want to have."

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