The Washington Post is reporting that the White House and unions have reached a tentative deal on the excise tax on so-called “Cadillac” health care plans:
Lawmakers said the agreement would raise the cost of unusually generous health policies and ignore secondary coverage, such as vision and dental plans. Health plans negotiated as part of collective-bargaining agreements would be exempt for two years after the 2013 effective date, giving labor leaders time to negotiate new contracts.
As you may have heard by now, many senators are proposing to back off of creating a government-run health care plan to cover uninsured Americans and instead want to task the Office of Personnel Management with running a smorgasbord of private health insurance plans that would serve Americans needing coverage. Senators appear to be modeling the idea after the existing Federal Employees Health Benefits Program (FEHBP), the health insurance program that serves about 8 million federal employees, retirees and their families.
Do you think that’s a good idea? Is OPM up to the challenge? Do you think such a plan might impact the FEHBP in some way?
8/21 UPDATE:Â U.S. Postal Service spokesman Gerry McKiernan just dropped me a line disputing Peter Roff’s take on the post office’s tax exemption. First, the Postal Service doesn’t own any planes on which it could pay taxes. Secondly, the Postal Service for many years was not allowed to run profits as a corporation does, meaning it had no income on which it would pay taxes, even without the exemption. (A 2006 reform allowed the Postal Service to turn a profit on competitive products like Priority Mail and package services, but in lieu of taxes, the post office uses some of that money to help cover the costs of first-class mail and other universal service obligations.)
Finally, while the Postal Service’s quasi-governmental status does yield some benefits (such as tax exemption on property), McKiernan pointed me towards a January 2008Â Federal Trade Commission study that said the Postal Service’s obligations — primarily its requirement to deliver universal mail service to every household and business in the country — far outweigh those benefits. Those obligations, FTC said, actually leave the Postal Service at a disadvantage when compared to its private-sector counterparts.
ORIGINAL POST: At a White House press briefing yesterday, Press Secretary Robert Gibbs was asked about the National Association of Postal Supervisors’ pushback against President Barack Obama negatively comparing the U.S. Postal Service to FedEx and UPS:
Q:Â In a letter sent last week to the White House from the National Association of Postal Supervisors, the president of that union, Ted Keating, said that his union had a “collective disappointment that you — meaning the President — showed the Postal Service as a scapegoat and an example of inefficiency.”Â Does the President — has the President seen that letter?Â Has he responded?Â Does he regret using the post office as an example of inefficiency?
MR. GIBBS:Â I doubt he’s seen that letter and I don’t have any reason to believe he regrets it, since he repeated it.
(Just for the record, NAPS isn’t a union. It’s a management association that does not collectively bargain. But that’s neither here nor there.)
The National Association of Postal Supervisors has fired back at President Barack Obama for dragging the U.S. Postal Service further into the health care debate. In an Aug. 14 letter, NAPS President Ted Keating accused Obama of using the Postal Service as a “scapegoat” and unfairly painting it as “an example of inefficiency” during a health care town hall meeting last week. Obama told a crowd in Portsmouth, N.H., Aug. 11 that private health care insurance providers should be able to compete with a government-run public option because “UPS and FedEx are doing just fine. … It’s the Post Office that’s always having problems.”
Keating pointed out that UPS and FedEx revenues are falling faster than Postal Service revenues, and reiterated the overtime, managementÂ and work hour reductions the Postal Service has made over the last year:
With all of these efforts underway within the Postal Service community, it was a kick to the chest to have you take a shot at a group of federal employees who are working hard every day to support this country.
Employees of the Postal Service are largely represented by unions and management associations, all of whom strongly supported your candidacy last year. For our support we do not expect any special consideration. However, we would like to be treated fairly and not have our current situation misrepresented, especially by the Commander-in-Chief.
What Obama also ignored last week was that the Postal Service isn’t on the same playing field as FedEx or UPS. The Postal Service has to contend with unions, lawmakers andÂ the Postal Regulatory Commission and as a result, can’t raise prices or close facilities on a whim the way its private-sector counterparts can when mail volume plunges.
As the debate over health care reform boils over, both sides are now using the U.S. Postal Service to score points. House Minority Leader John Boehner, June 11:
If you like going to the DMV and think they do a great job, or you like going to the post office and think it’s the most efficient thing you’ve run into, then you’ll love the government-run health care system.
And President Barack Obama at this afternoon’s health care town hall meeting in Portsmouth, N.H., as reported by the Associated Press:
[Obama] also disputed the notion that adding a government-run insurance plan into a menu of options from which people could pick would drive private insurers out of business, in effect making the system single-payer by default.
As long as they have a good product and the government plan has to sustain itself through premiums and other non-tax revenue, private insurers should be able to compete with the government plan, Obama said.
“They do it all the time,” he said. “UPS and FedEx are doing just fine. … It’s the Post Office that’s always having problems.”
That sound you just heard was Postmaster General John Potter’s head hitting his desk.
There’s one man, however, who will stick up for the embattled Postal Service: Jon Stewart. Video after the jump:
House Oversight and Government Reform Committee Chairman Edolphus TownsÂ said in a letter yesterday that the health care bill now before Congress would require “some administrative and a smallÂ number of benefits-related adjustments” to some plans under the Federal Employees Health Benefits Program. Those changes would be necessary to make sure all FEHBP plans meet the government’s standards of a “qualified health benefits plan,” Towns said in his letter to Ranking Republican Darrell Issa.
The health care bill, HR 3200, would require all citizens to have a minimum level of insurance coverage through a qualified health benefits plan or other form of coverage.Â Issa asked Towns on July 17 whether federal employees and their dependents enrolled under FEHBP would be in compliance with that requirement.
Towns did not say in his letter what kind of benefit adjustments would need to be made to which plans. Federal Times has put in a call to the committee staff to find out more on this.
Towns said any changes would not need to be made until 2018, and said FEHBP would not need a majorÂ overhaul.
Issa had asked Towns to hold a hearing on how the health care bill will affect federal employees, but Towns does not plan to do so.