Dems, unions agree on new plan to tax Cadillac plans

(By Ed Morrissey, Hot Air) - Under pressure from Barack Obama to come to terms with a Senate plan to tax high-value medical coverage, unions and Congressional Democrats have apparently agreed to accept some taxes that would impact their membership — but not right away. The plan reported by the AP would exempt any plans created by collective bargaining prior to 2013, which means that unions won’t have to worry about the tax until at least 2015 or beyond, depending on the schedule for renegotiation:

The White House has reached a tentative agreement with union leaders to tax high-cost medical plans, one of the final obstacles in the way of President Barack Obama’s health care remake, officials said Thursday.

Details of the agreement were not immediately available. The tentative deal was expected to be presented to congressional leaders Thursday as negotiators try to wrap up an agreement on core elements of the sweeping legislation as early as Friday.

The proposed tax has been a major sticking point because early versions from the Senate would have hit union members, who have negotiated generous health benefits, sacrificing higher wages. House Democrats were strongly opposed, and did not include the tax in their bill. But Obama favored the tax, citing the consensus opinion of economists that it would help hold down costs by nudging workers into less pricey coverage.