Union Pensions Getting BIG Payoff From Obamacare

by Warner Todd Huston | August 14, 2009 2:16 am

It isn’t just out of the goodness of their hearts that Big Labor is gearing up to spend millions to help President Obama to jam Obamacare down the throats of the American people. The unions stand to get a big payoff of $10 billion to supplement their failing pension plans.

The President of the AFL-CIO recently announced that the union would jump into the healthcare fight to help out “working people.” John Sweeney also said that the healthcare fight is “the next big step in our march to turn around America.”

But unions already have their own healthcare plans and Obama promised — for whatever an Obama promise is worth — that union plans would be untouched by Obamacare. So, what are the unions in the fight for if it doesn’t really touch them?

The answer to that question appears in the House bill on page 65, section 164 where unions are to receive a $10 billion dollar infusion of taxpayer’s money to supplement their failing plans through a program called the “reinsurance plan.”

In his open letter, Sweeney said that one of the union’s goals was to seek “relief for company/union funds providing pre-Medicare retiree coverage.” This would be people that retired from the unions before they are eligible for Medicare. In other words, the union is looking for federal funds to relieve expenditures from his over extended pension plans.

Well, low and behold the House healthcare bill has included in it a “Reinsurance Program for Retirees” (section 164). This section stipulates that $10 billion will be set aside for this program of “reinsurance” for those older than 55 and not yet eligible for Medicare.

This program will reimburse eligible “retirees” for 80% of the costs of their medical care. This would go a long way to help unions defer costs to their own plans.

So, no wonder the unions are so hot to help Obamacare pass. It will be a boon to their overextended pension plans.

(Cross posted at The UnionLabelBlog.com[1].)
(H/T Jeanne)