By Tom Curry National affairs writer
updated 9/28/2009 9:30:05 AM ET 2009-09-28T13:30:05

Claim: Although high-cost health insurance plans are subject to tax under the new legislation, those negotiated by unions are not.

In order to pay for giving insurance to the uninsured, the Democrats' bills raise revenue in various ways. The Senate Finance Committee bill, for instance, would limit tax deductions for people with very high medical expenses and would impose fees on medical device manufacturers, pharmaceutical firms, and insurance companies. But it would raise most of its revenue — more than $200 billion over seven years — by taxing high-cost insurance plans. Workers with high-cost plans provided by their employers would likely see those benefits shrink.

Fact or fiction?
A little of both. The Finance Committee bill would impose a 40 percent tax on insurance plans which cost more than $8,000 for individual or $21,000 for family coverage. The bill partly shields early retirees and workers in certain high-risk jobs — coal miners, firefighters and others. For such people, the tax on their insurance would begin to bite at $8,750 for individual and $23,000 for family coverage. Some workers in those industries are unionized. The International Association of Fire Fighters, for instance, represents 270,000 U.S. workers, but the union says the higher tax thresholds don't fully protect its members. Finance Committee member Sen. Debbie Stabenow, D-Mich., has proposed an amendment to fully exempt many early retirees, some of them union members, from the tax.

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