So what, you ask, are the implications of the health-care reform bill for education?
Well, the main one is that as part of the way to lower the bill’s overall costs, high-cost health insurance plans, sometimes called “cadillac” or “gold plated” plans, will be subject to an “excise tax.” Many unionized employees, including teachers, have over the years traded higher compensation for better benefits, so this provision stands to affect probably a good number of them.
The teachers’ unions, along with organized labor on the whole, lobbied hard to get rid of this provision. They didn’t manage to accomplish that goal, but they did win a few major items in the budget-reconciliation bill, which will alter key parts of the Senate bill.
For one, the excise tax won’t kick in until 2018, rather than the 2013 date which was in the Senate’s version of the health bill. The income thresholds that would qualify a health plan as a “cadillac” plan are higher than under the Senate bill, and will be aligned to inflation over time. And finally, there will be a mechanism that makes adjustments to the thresholds based on the age and the gender of the group insurance pool.
That’s a particularly important change for the teachers’ unions, because their membership is still predominately female and also has a large percentage of baby-boomer teachers. Traditionally, explained Bill Raabe, the director of collective bargaining and member advocacy for the National Education Association, both women and older individuals paid higher premiums.
“We’re completely supportive of the bill, and we think those changes were good changes for the good of working people,” Raabe told me yesterday.
The caveat here is that these reforms aren’t a done deal until the Senate passes the budget-reconciliation package containing the fixes. But the indications are that the package will pass. Here’s a graphic from the Washington Post that explains some of the changes.
It’s hard to know just yet what the delay on the excise tax will mean at the local level, Raabe said. Right now he’s encouraging local affiliates to take their time to look at all their options and see how implementation goes over the next couple of years.
Presumably, local unions could, in the course of renegotiating contracts, try to scale back compensation in the form of health packages and put it into other areas, such as wages or pensions benefits.
There’s a political implication for the ESEA renewal process, too. Now that Obama has his first legislative victory at hand—though it remains to be seen what will happen in the November elections—it seems unlikely that Republicans are going to want to hand him a second one this year by getting ESEA done.
I predicted a few days ago that we’ll be hearing more mumblings and grumblings about the Obama administration’s plans to yank the supplemental services and public-school choice options from ESEA. Here’s Rep. John Kline, the ranking Republican on the House Education and Labor Committee, on that very issue just last week:
Tutoring and transfer options are the only immediate remedies for parents of children trapped in underperforming schools. Backing away from these critical parental options by making their availability elective rather than mandatory is a tremendous disappointment, and one that could leave more than half a million students without the educational lifelines they depend on."
A version of this news article first appeared in the Teacher Beat blog.