White House has bad news for unions, tough talk for insurance companies

Democrats were so angered by last week's attack on their health care proposals by the insurance industry they have hit back hard with a threat of revoking the industry's antitrust exemption. But, how serious are they?

Obama's top advisor, David Axelrod, signaled on ABC's This Week that the president is not ready to take that dramatic step, which would likely eliminate any chance of the two sides working together on health care reform.

Both the Senate and House have introduced bills to revoke the exemption and the House Judiciary Committee, led by Rep. John Conyers, D-Mich., is set to vote on legislation in his panel this week.

And Obama dangled the threat over the industry in his weekly radio address, reminding insurers that “they're earning these profits and bonuses while enjoying a privileged exception from our anti-trust laws, a matter that Congress is rightfully reviewing.”

Still, when pressed several times by about whether Obama would sign a bill that takes away the exemption, Axelrod avoided a direct answer, telling This Week Host George Stephanopoulos, “We'll see what Congress does.”

He then suggested a must lighter sentence for punishing the industry: implementing a provision in the House health care bill that would require the health care industry to provide rebates money to consumers if they spend below a certain amount on medical care.

“That seems like a good idea,” Axelrod said.

Meanwhile, despite intense opposition from the labor unions, President Obama is still in favor of a imposing a tax on expensive insurance plans to help pay for his health care reform proposal.

White House Chief of Staff Rahm Emanuel told State of the Union host John King that the proposed tax on so-called Cadillac plans worth more than $8,000 for individuals and $21,000 for families is “one of the ways in which you basically put downward pressure on health care costs.”

Emanuel said that while Obama “opposed this originally, [he] thinks that, and based on the analysis, it is helpful in getting costs under control.”

Emanuel pointed out that the tax would be paid by insurance industries, but critics, mainly labor unions whose workers have high-cost plans, say the tax would be passed on the policy holders.

King reminded Emanuel that Gerry McEntee, the president of the American Federation of State, County and Municipal Employees, called the proposal “a slap in the face,” for unions that worked hard to help Democrats get elected.

 

 

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