All That Glitters Is Not Gold

Democrats aimed to stick it to Goldman Sachs execs with a tax on gold-plated Cadillac insurance plans to help pay for President Obama's health reform. But after unions balked because the tax would hit their members, a proposal in a key Senate committee is being rewritten.

"We have to distinguish between Chevy plans at Cadillac costs and high-benefit plans," says union boss Andy Stern, who heads the Service Employees International Union.

Stern and other labor leaders are lobbying Washington lawmakers to ease up on plans to tax high-cost health plans that are common benefits for unionized workers. In many cases, health plans are expensive because of soaring medical costs in particular markets, Stern says.

Democrats are listening. Senator Max Baucus tells the Wall Street Journal that he's revising his proposal on Cadillac plans, raising the threshold for policies subject to a tax. An early version of Baucus' reform plan calls for a tax on family health insurance plans valued at $21,000 a year. (The Goldman Sachs example cited by Democrats refers to some execs who reportedly received health policies valued at $40,000 a year.)

Baucus also is reevaluating a proposed requirement that all individuals purchase health insurance. While he still favors the mandate, he's rethinking the specifics as well as a proposed $3,800 fine on uninsured families, the Journal reports. Baucus, chairman of the Senate Finance Committee, is drafting the legislation considered the template for a final reform bill. His committee debates the bill this week.

Baucus didn't specify how he would raise additional revenue to make up for his changes, but the Journal says it would come "likely from the health care sector."