Politico shook up the health care policy world Wednesday night with a report that members of Congress in both parties were holding secret talks to try to exempt members and their staffs from Obamacare. Before I get into the complicated layers of issues involved, the bigger picture is this: members of Congress and their staffs are grappling with the type of uncertainty and logistical headaches that individuals and businesses are struggling with as they try to adapt to life under an extremely complex and poorly drafted law.
The essential issue is this. Back in Sept. 2009, when the Finance Committee was drafting its version of the health care bill, Sen. Chuck Grassley, R-Iowa, offered a conceptual amendment that required members of Congress and their staffs to enroll in the health care program being contemplated by Democrats. Beyond the political value, the idea was to make sure that Congress was living under the laws they were imposing on the rest of the country. The conceptual amendment passed, but Senate Majority Leader Harry Reid inserted the actual language that made it into the law.
Fast forward several years and now Obamacare is on the cusp of being implemented. Based on this provision of the law, members of Congress and their staffers are supposed to purchase their health insurance through the newly created exchanges, which are scheduled to open on Oct. 1 and begin delivering benefits next January. This raises a number of issues.
The most pressing question is, who helps pay for the coverage of members and their staffs? Right now, their coverage is subsidized by the federal government (in its capacity as an employer). However, larger employers aren’t supposed to have access to the Obamacare exchanges until 2017. And the federal government is a pretty large employer.
If the federal government (acting as employer) cannot provide subsidies to members and their staffs, than how else are they going to get coverage? Under Obamacare, individuals making up to about $46,000 are eligible for at least some subsidy, but individuals who earn more are on their own. Good luck finding qualified people to work long hours for lower pay than they could receive in the private sector if they can’t even get health insurance. Also, under Obamacare, employers who don’t offer health insurance could face fines of $2,000 per employee if any of their employees obtain insurance through an exchange. Does that mean that the federal government (as an employer) would have to pay a mandate penalty for all those Congressional staffers who get health insurance through an exchange?
In lieu of providing benefits, could the federal government (in its role as an employer) simply offer a comparable salary boost or cash payout to Capitol Hill staffers to help them pay for insurance? As Cato’s Michael Cannon noted in a phone conversation, if such a payout is tax-free, it would amount to a sweetheart deal. If it isn’t, it would substantially reduce worker purchasing power.
If members of Congress and their staffs are told they can remain in their current federal benefits plan, it would mean that they’d be violating the Grassley amendment by opting out of the exchanges.
Right now, members of Congress and their staffs are eagerly awaiting a ruling by the federal Office of Personnel Management (OPM) on the matter. In response to the Politico report, House Speaker John Boehner made clear that he wouldn’t support any sort of legislative workaround. “We’re not sneaking any language into bills to solve (the Democrats’ health care) problem,” Boehner wrote on Twitter. “The solution to this & other ObamaCare nightmares is (full repeal).” In an emailed statement, Brian McGuire, a spokesman for Senate Minority Leader Mitch McConnell, offered a similar tone: “It’s no surprise that Democrats would want to exempt themselves from the train wreck they created in Obamacare, but he believes the entire country should be exempt from this historic mistake. The law is a disaster and needs to be repealed.”
The Washington Post’s Ezra Klein, an ardent defender of the law, attempted to pour cold water on this story, describing Congressional talks as “an effort to fix a drafting error” that could be rendered moot by an OPM ruling. “Even if OPM rules against us,” Ezra quotes one staffer as saying, “it’s inaccurate to imply that any talks are aimed at exempting federal employees from routine mandates of ACA since any talks are about resolving the unique bind that the Grassley amendment puts federal employees in.”
But the premise of the Grassley amendment was included in the law that every Democrat in the Senate voted for. A subsequent attempt by Grassley to clarify Reid’s version of the provision (and include the President, Vice President and political appointees in the executive branch) was rejected on March 24, 2010 as Democrats made their final health care push. The amendment couldn’t be passed through reconciliation, a process that Democrats resorted to using to get the bill across the finish line. In other words, this issue was completely caused by the drafting and legislative process employed by Democrats.
In the years since the health care law’s passage, we’ve seen businesses and states seeking waivers from ill-conceived provisions of the health care law, business owners contemplating demoting full-time workers to part-time status to avoid fines, and recently, even a union calling for the law’s repeal. The reality is that the law puts many Americans in their own unique binds.
Perhaps OPM will find a way to resolve this particular issue facing members of Congress and their staffers. But it’s saying something that with all the senators, representatives, lawyers, legislative gurus and health care policy experts floating through Capitol Hill, there’s still utter confusion about what the proper application of this particular provision is. How are tens of millions of Americans and millions of businesses supposed to make sense of the law and determine how it will affect their special circumstances?