News & Events

Nation’s Largest RN Organization Blasts Bid to Tax Benefits

Urges Other Reforms to Protect Patients, Families In Final Talks on Healthcare Reform Legislation

The nation’s largest union and professional organization of registered nurses today called on House members to hold the line in opposing a tax on workers’ healthcare benefits, and called for other changes in the final healthcare legislation to expand affordability and crack down on insurance industry abuses.

“It is unconscionable that workers and families with employer-sponsored health plans, who receive virtually no benefits from the proposed legislation, would have their health coverage taxed and seriously eroded.” said Deborah Burger, RN, co-president of the 150,000 member National Nurses United, formed last month through a unification of the California Nurses Association/NNOC, United American Nurses, and Massachusetts Nurses Association.

“Enactment of this tax would be a disgraceful betrayal of working families and their yearning for genuine reform,” Burger said.

The excise tax on workers’ benefits is a central plank of the Senate version of the bill, and is supported by the White House, in contrast to the House bill which instead sets new taxes on the highest income earners. Congressional Budget estimates say the tax would affect 19 percent of employer-paid plans, 30 million Americans by 2016, a number that the Citizens for Tax Justice says will soar to 58 million people by 2019.

“Advocates of the tax have made clear their intent, to force working people into cheaper, high deductible plans that provide less coverage and shift more costs to employees. The inevitable effect will be more people skipping needed medical care, enduring much higher out-of-pocket costs and risking financial ruin due to medical bills,” said NNU Co-president Karen Higgins, RN.

A Towers-Perrin employer survey last September found 86 percent of employers would pass along their higher costs to employees, “an especially bitter pill for those working families who were assured that health reform would not undermine their present coverage,” said NNU Co-president Jean Ross, RN. “They will be saddled with higher costs and less coverage, while insurance companies will still have free reign to raise premiums, co-pays, deductibles, co-insurance and other fees, and continue to routinely deny needed medical care.”

“Enactment of the tax, whose central premise is to control healthcare costs by reducing utilization of needed medical care while failing to control the pricing practices of the healthcare industry, would symbolize a central failing of the proposed legislation, ceding far too much to the insurers and the rest of the healthcare industry,” Burger added.

In addition to calling on Congressional leaders to drop the excise tax, NNU is calling on Congress to make other changes in the final bill, including:

  1. A state waiver to ERISA, the federal employee retirement system, to allow states to pass Medicare for all/single-payer reforms without a court challenge from healthcare corporations.
  2. Medicaid expansion to 150 percent of the poverty level (the House version) rather than the more limited Senate Medicaid expansion. Half of the increased coverage under the bill comes through Medicaid expansion; with the failure of Congress to stop the price gouging of the insurers and drug companies, the broadest possible increase in Medicaid eligibility is essential for American families.
  3. Closure of the loopholes on the insurance regulations in the bills that ostensibly ban rescissions (insurers dropping people when they get sick) and refusal to sell policies to people with pre-existing conditions.

Among the ways to close those loopholes are:

  1. Eliminate the state-based exchanges in favor of a strongly regulated federal exchange, to prohibit insurers from avoiding strong consumer won protections in some states by issuing the policies in unregulated states.
  2. Prohibit rescissions under any circumstances. The current bill allows patients to be dropped for “fraud or intentional misrepresentation,” the same pretext insurers commonly use now.
  3. Prevent insurers from being able to charge up to four times more based on age, or more for certain conditions. No age-based premiums should be allowed, and the bill should include a direct prohibition on marketing gimmicks that enable insurers to avoid sicker enrollees.
  4. Bar the higher charges allowed for employees who fail “wellness” programs because they have diabetes, high blood pressure, high cholesterol readings or other chronic conditions.

“The repeated concessions Congress and the White House have made to opponents and obstructionists has gravely weakened the promise of reform,” said Higgins. “Nurses will continue to campaign for more cost effective, comprehensive reform by expanding Medicare to cover everyone, and passing single payer bills in individual states.”

“In the meantime, Congress has one final opportunity to fix some of the worst problems in this legislation. We will be closely monitoring the votes of our legislators on the final bill,” Ross said.

“We ask and expect members of the House of Representatives to vote no on any bill providing for an excise tax on health care benefits.”