On January 15, Fox & Friends misrepresented the details of the recent health care negotiation relating to proposals to taxing high-cost "Cadillac" health care plans by falsely claiming that the proposal to "eliminate from any taxing dental and vision" policies applied only to union members, and Fox & Friends repeatedly claimed that the concessions won during the negotations were "a bribe" to unions. In fact, most of the negotiations, including the dental and vision exemptions, apply to all workers -- not just union workers -- and the extension given to union members regarding the implementation of the excise tax was reportedly made in order to allow unions time to negotiate less expensive plans for their workers.
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Fox & Friends falsely claimed dental and vision exemption applied only to unions
From the January 15 broadcast of Fox News' Fox & Friends:
BRIAN KILMEADE (co-host): When they did -- when they looked at the books and gave it to the CBO and said, what do you think about this in the Senate? They said, OK, this is how much it's going to cost, and this is how much it is going to save on the deficit. So they needed this money, this 40 percent tax, which is just abhorrent to a lot of people factored in.
So, all of a sudden, on Tuesday, when the leadership of the unions come in and talk to the president, and the president is now hands-on, sleeves are up, he said, I got to have this money. And then [unintelligible] calls yesterday and says, I think I have a deal for you. I'm going to delay the tax on you, and it's going to cost this plan $60 billion, but I'm going to delay it for five years. Now, your neighbor who is not in the union, by 2013, they're going to pay a 40 percent tax. Something else I'm going to give the unions -- we're going to eliminate from any taxing dental and vision.
So, in other words, your health plan is going to be taxed in 2018. Now, you're thinking to yourself, well, you're just delaying the inevitable. This is a long-term process of revamping the health insurance industry. But I'm looking at some of the quotes from the union heads, and they're saying we have a few years to make this better.
STEVE DOOCY (co-host): Sure.
KILMEADE: So it's only going to get better for the unions.
In fact, exemption for vision and dental plans reportedly apply to all workers
Reports indicate dental and vision plans would be exempt for all workers. The Washington Post reported in a January 15 article that "[t]he tax on high-cost policies was designed in the Senate, which voted to impose a 40 percent excise levy on family policies that cost more than $23,000 a year -- far above the national average of $13,400, according to the Kaiser Family Foundation." According to the Post, "The deal cut Thursday would raise the value of policies subject to the tax to $24,000 for families and $8,900 for individuals," with various caveats, including that "[d]ental and vision plans would be exempt starting in 2015." The Los Angeles Times also reported on January 15 that "[t]he compromise would raise the threshold for family plans subject to the tax from $23,000 to $24,000 and exempt the cost of dental and vision plans." The New York Times reported that "starting in 2015, the cost of separate coverage for dental and vision care would be excluded from the calculations." The Wall Street Journal similarly reported that the agreement included "the value of dental and vision benefits wouldn't count toward the threshold."
Moreover, Fox & Friends ignored that nearly all concessions won applied to all workers, not just unions
Fox & Friends declare deal is "only going to get better for unions," suggest no one is "represent[ing] the middle class." In focusing extensively on the extension given to union members regarding the commencement of the excise tax on high-cost plans, Fox & Friends repeatedly ignored that most of the changes that resulted from the negotiations reportedly apply to all workers. For instance:
- Value of policies subject to tax reportedly increased. According to numerous news reports, the value of insurance plans that would be subject to the tax were increased to $24,000 for families and $8,900 for individuals, annually. According to The New York Times, these "thresholds would rise with the Consumer Price Index, plus one percentage point. The thresholds would be further increased if insurance costs grow faster than expected from 2010 to 2013." Fox & Friends made no mention of this change.
- Premium threshold would be higher for those in high-risk professions. The New York Times reported that "[f]or people in certain high-risk occupations, including police officers and construction workers, thresholds would be higher: as high as $27,000 for a family." The Washington Post and Los Angeles Times similarly reported that the threshold would increase for those in high-risk professions.
- Women and older workers reportedly "receive an additional break" on premium threshold due to high cost of their medical care. Fox & Friends also did not report that, according to the Los Angeles Times, there would be higher thresholds "for plans with large numbers of older people and women -- whose care tends to be more expensive." The Washington Post also reported that "[p]lans with significant numbers of women or older workers would receive an additional break," and The Wall Street Journal reported that "the threshold would rise further for plans where premiums were higher because the work force was older or had more women."
- States with higher health costs also reportedly received adjustments to premium threshold. Both The Washington Post and The Wall Street Journal reported, in the words of The Wall Street Journal, "There are also adjustments for 17 states with particularly high health costs."
Fox & Friends described as fact that the excise tax extension given to unions was a "bribe" for support and votes
From the January 15 edition of Fox & Friends:
KILMEADE: So it's only going to get better for the unions. And you think if they're all of a sudden marching in lock-step, don't you think it's a wink and a nod, perhaps, makes one conclude --
DOOCY: It's more than a wink and a nod.
GRETCHEN CARLSON (co-host): It's a wink and a nod and a vote in the 2010 elections.
KILMEADE: But it'll get better and better for your unions.
CARLSON: And a vote in the next elections.
DOOCY: You know, the big speed bump for the president's health care initiative over the last couple of weeks has been the unions, because they've, you know, they said we're going to have to come out and say we cannot go along with this --
KILMEADE: Are they the third branch of government?
DOOCY: So what do they do? They dangle this -- and let's be flat-out factual about this -- it's a bribe. It is simply a bribe so that the unions would go along with it. But if you're not in a union, you're going to have to pay.
CARLSON: Well, who's going to represent the middle class people in America? Because they don't have that big voice. They don't have the opportunity to go to Capitol Hill and hold a press conference as a representative of a union. Who's going to represent you?
DOOCY: Gretch, I'll tell you when their voices are going to be heard. Next election --
KILMEADE: Or in Massachusetts, next week.
DOOCY: Just watch. Exactly right.
Fox & Friends ignores reporting that extension is to allow time for multiyear contracts to renegotiate
Washington Post: Exemption to give "labor leaders time to negotiate new contracts." The Washington Post reported that "workers with collective-bargaining agreements and government employers would be exempt until 2018, giving labor leaders time to negotiate new contracts."
Los Angeles Times: "Labor leaders said that transition time was needed to accommodate unions and employers with multiyear agreements." The Los Angeles Times reported: "Republicans immediately criticized the Cadillac-tax compromise, especially the provision postponing its application to union health plans until 2018. Labor leaders said that transition time was needed to accommodate unions and employers with multiyear agreements." The article also noted that "[o]rganized labor had bitterly opposed the healthcare tax, arguing that union members had negotiated generous benefits in lieu of pay increases."
Volsky: "Unlike non-union labor negotiations which can be re-negotiated annually, collective bargaining agreements tie unions down for multiple years." The Wonk Room's Igor Volsky argued that "unlike non-union labor negotiations which can be re-negotiated annually, collective bargaining agreements tie unions down for multiple years. The temporary exemption allows them to get out of the way of a moving train. After all, collective bargaining agreements are not the same as raise negotiations for non-union employees. While the latter operates under the implicit assumption that a certain percentage of compensation is dedicated for health benefits and is exempt from taxation, a union collective bargaining agreement enters into an explicit trade off between taxable and nontaxable compensation." Volsky added:
Typically, a union negotiates a certain dollar agreement from the employer for total compensation as well as how that will be divided between wages and benefits. The employer could agree to compensate its workers $30 per hour and the union would decide to allocate $20 to wages and $10 to health care. Or, it may choose to spend $15 on wages and $15 on health care. Whatever the case, the unions weighs the benefits of receiving tax deductible health benefits with the immediacy of higher wages and agrees to abide by the agreement for several years.
Without an exemption period, the excise tax would change the rules midstream. Non-union workers with expensive health care benefits could change their compensation package in anticipation of the new tax, but unions with health policies of above $24,000 would pay higher taxes until their contract expires. The temporary exemption still accomplishes the goals of the excise tax -- pushing people into lower cost health care plans -- but gives unions more time to change their behavior and switch to cheaper policies.