Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.
The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said. (Politico)
Here’s the problem: lawmakers and their staffs will no longer be eligible for federal employees insurance (which is 75% subsidized by the federal government). They will have to go to the exchange instead. But the only subsidies in the exchange are for people below 400% of poverty. For family coverage, this implies a loss of about $12,000 in tax free benefits for the others.
Under the heading “Does Congress Understand How ObamaCare Works?” Aaron Carroll had this to say:
There’s nothing in the law that prevents Congress from paying for the insurance, and they will. Congress covers most of the cost of insurance now, just like tons of employers, and they will continue to do so in the future. This is only a change in purchasing venue for the plans. I don’t know whether the legislators interviewed for this story don’t understand the law, or are purposely making up facts about it for political gain. I also don’t know which of those two options is worse.
Oops, sorry Aaron. You are the one who is misinformed here. HHS has made it abundantly clear that employers may not use pre-tax dollars to pay premiums for their employees in the health insurance exchange. They may give employees after-tax dollars (say, by increasing their wages by the amount of the current health insurance benefit they must give up), but that would decrease its value to the employee by 30% to 50%, depending on the employee’s tax bracket.
Even worse, I suspect, is the kind of insurance the employees will have. If the Massachusetts reform is precedent, insurance sold in the exchange will pay doctors only slightly more than Medicaid. Think of those plans as Medicaid Plus.
And that seems fitting. Shouldn’t the members of Congress who have been telling us how wonderful Medicaid is experience it first hand?
…Hmmm…I wonder if there is any way we could enroll Paul Krugman?