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Real Talk from Andy Stern

By Matthew Yglesias on January 9, 2010 at 1:49 pm

"Real Talk from Andy Stern"

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Jeff Young has a must-read piece based on an interview with Andy Stern in which the SEIU leader shares his latest thinking. He remains opposed to the excise tax on unusually costly health insurance plans, but at the same time seems reconciled to its inevitability. He also offers this:

Stern expressed strong frustration with the Senate and with those centrists — without calling any out by name — and hinted that labor unions and their members, who contributed with money and effort to winning Democratic majorities in the House and Senate, would be less motivated next time around.

“Democrats were given a gift that they have squandered,” Stern said. “If this is the way the Senate is going to do business when they have 60 votes, they’re pretty much guaranteeing a self-fulfilling prophecy that they won’t have 60 votes.”

Later in the piece, Stern hints at the direction of what I think would be the most reasonable compromise on the excise tax issue:

One problem with that approach, Stern said, is that approach presumes the high premiums are equivalent to excellent benefits, which is not always the case partly because of the widely varying costs of medical care and cost of living in different regions of the country. Some people pay “Cadillac costs for Chevy benefits,” Stern said.

The specific example of regional variations in costs doesn’t strike me as hugely compelling, but the general point that plans can have variable costs for reasons other than generosity of benefits is reasonable. Henry Aaron’s proposed modification that would “base the tax on high-cost plans not on each company’s actual cost, but on the cost of each company’s plan as applied to a population of standardized age distribution” would be a good idea and would meet some of these concerns.

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