Will Congress exempt itself from ACA exchange provisions?

by on April 25, 2013 at 7:32 am in Current Affairs, Law, Medicine | Permalink

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…

There is concern in some quarters that the provision requiring lawmakers and staffers to join the exchanges, if it isn’t revised, could lead to a “brain drain” on Capitol Hill, as several sources close to the talks put it.

The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer — in this case, the federal government. If not, aides and lawmakers in both parties fear that staffers — especially low-paid junior aides — could be hit with thousands of dollars in new health care costs, prompting them to seek jobs elsewhere. Older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty.

Plus, lawmakers — especially those with long careers in public service and smaller bank accounts — are also concerned about the hit to their own wallets.

Here is more, via these guys.

Addendum: Here is a response from Ezra Klein to the Politico story, but I don’t see that it counters the basic point, as reflected by this brouhaha, that the exchanges are not necessarily such a wonderful place to be, especially for low wage workers.  Megan McArdle also comments.

joshua April 25, 2013 at 7:50 am

I’ve heard countless opponents claim they were already exempt; I wonder what percent of people think so. Still, I can’t think of a better way to signal that the law is not what it claims to be.

mw April 25, 2013 at 8:03 am

From what rules does congress not exempt itself? This will merely legitimize ACA as a mainstream law.

msgkings April 25, 2013 at 12:19 pm

So cynical and yet so true

Andrew' April 25, 2013 at 8:05 am

“The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer”

How much are not.gov firms required to subsidize their employees insurance?

Andrew' April 25, 2013 at 11:30 am

And why are Congressmen and their staff ‘employees’ of the federal government in any way other than wages and benefits? They should probably be independent. The Grassley Amendment is a bit of legislation points towards that direction as does this ridiculous situation.

foosion April 25, 2013 at 8:08 am

They could pay their staff more.

The members of congress and the Senate are paid at least $174,000/year, which should be enough to afford insurance.

Perhaps they could work on lowering costs, instead of exempting drug companies from Medicare price negotiation, screaming about death panels, limiting doctor immigration, etc., etc.

Dave T April 25, 2013 at 9:37 am

Privileged kids work for Congress for the prestige and experience so they are willing to do it for a lot less than otherwise. It’s like an internship.

Urso April 25, 2013 at 10:27 am

Now THIS is a real problem.

RZ0 April 25, 2013 at 9:54 am

Agreed – this is a silly story. If an aide making 25K moves from a group plan with 7K of coverage (high estimate, BTW) to buy a 7K policy from the exchange, he should be getting a 7K raise. This won’t raise government spending because the government already spends it on the group plan.

There’s a tax issue, of course, at least a couple of years from now. But that’s solved by grossing up the 7K to cover the taxes on the additional income. Call it 9K. This still won’t affect the deficit because the government will collect the 2K in taxes it is paying in additional salaries.

And it’ll give Republicans a chance to squawk about 36% (9K/25K) increases in Congressional salaries.

So everybody’s happpy.

Zephyurs April 25, 2013 at 8:08 am

Sigh. Sources: vague statement by Steny Hoyer’s office, and a bunch of Republicans intent on propagandizing.

Better trolling please.

dan1111 April 25, 2013 at 8:23 am

It is unthinkable that Hoyer’s office would make a vague statement implying they were involved in this if it were just Republican propagandizing. Instead the response would be “Of course we are not going to opt ourselves out of Obamacare, and we are outraged that the Republicans are making that claim”.

Also think about this quote by Boehner’s office:

“When asked about the high-level bipartisan talks, Michael Steel, a Boehner spokesman, said: ‘The speaker’s objective is to spare the entire country from the ravages of the president’s health care law. He is approached daily by American citizens, including members of Congress and staff, who want to be freed from its mandates. If the speaker has the opportunity to save anyone from Obamacare, he will.’”

If this was something the Republicans were making up, they would not claim that they are in on it, too–they would just blame the Democrats.

liberalarts April 25, 2013 at 8:19 am

Not every employee on the Hill is a congressman earning $174k. I knew a Ron Paul staffer in the early 2000s who I believe was making less than $30k per year from that job then (with a masters!). I don’t think that Paul was being a cheapo, rather that was the going rate for such jobs.

anon April 25, 2013 at 8:47 am

Not every employee on the Hill is a congressman earning $174k.
There are many people all over this great land of ours who make less than $30,000 annually.

So, what’s your point?

liberalarts April 25, 2013 at 9:32 am

This was a point meant for the Foosion comment above.

charlie April 25, 2013 at 8:54 am

Was that the Ron Paul aid who died from not having insurance?

Andrew' April 25, 2013 at 9:51 am

No. What dumbass told you that? The guy you are referring to died from government-inflated healthcare costs. You don’t die with $400,000 in medical bills if you didn’t receive care.

RPLong April 25, 2013 at 8:20 am

Congress doesn’t pass the first necessary condition of a brain drain.

Late Bird April 25, 2013 at 8:49 am

beat me to it.

JWatts April 25, 2013 at 9:33 am

Burn!

Jan April 25, 2013 at 8:45 am

I think this headline here is misleading. At its core, the issue is not about Congress’ opposition to getting their health insurance through the exchanges–it is about whether the federal government will continue to subsidize the insurance of members and their staff. Apparently the feds pick up 75% of premium costs for them now.

Congress wouldn’t totally exempt itself from the ACA. What they would end up doing is treat themselves like any other employer under the ACA, by allowing staff to stay on their current insurance plan, rather than be required to go to the exchanges to get their insurance.

foosion April 25, 2013 at 9:21 am

Yep. The entire issue is continuing to subsidize insurance costs. There’s no attempt at a broader exemption. For more, see http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/25/no-congress-isnt-trying-to-exempt-itself-from-obamacare/

Jan April 25, 2013 at 9:28 am

I should have refreshed the page before posting the article.. Whoops!

Jan April 25, 2013 at 9:27 am

Here is more from the Washington Post: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/25/no-congress-isnt-trying-to-exempt-itself-from-obamacare/

The headline is “No, Congress isn’t trying to exempt itself from Obamacare”.

Yawn.

JWatts April 25, 2013 at 9:41 am

“The headline is “No, Congress isn’t trying to exempt itself from Obamacare”. ”

Except that after reading Ezra Klein’s post, the headline is wrong.

Obamacare: The only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are — (I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act).

Their trying to modify this amendment or ‘work’ around it, in some way. If the staffers aren’t subjected to either option I or option II, then they darn well are exempting themselves from Obamacare.

Jan April 25, 2013 at 10:41 am

That is true only in that lawmakers are attempting to exempt themselves from a special provision of the ACA that applies only to members of Congress and their staff in order to allow them to continue to receive employer contributions toward their insurance. All the other provisions would still apply to them. I think the framing is misleading.

Andrew' April 25, 2013 at 10:36 am

So, the real answer is that they are already exempted from the market AND they want to be exempted from Obamacare.

Michael April 25, 2013 at 11:10 am

I think the real answer is that they don’t really care where they get their insurance from as long as their employer is helping to pay for it, as is the case with the majority of Americans.

Andrew' April 25, 2013 at 12:00 pm

Unfortunately, assuming you are correct and the majority doesn’t understand how labor costs work, the minority who don’t want to reinforce employment-based insurance and in fact want to reduce or remove it include nearly all economists.

Michael April 25, 2013 at 12:27 pm

Andrew’, The economists you’re talking about often assume that total compensation won’t change much. Firms will pass on the savings from the insurance premiums as higher wages.

The issue here is that total compensation is changing. That money that was being used to subsidize health care coverage is not being passed on in the form of wages. It’s a huge cut to total compensation. That’s an incredibly important distinction.

Master of None April 25, 2013 at 8:46 am

‘And the Lord said, “If I find in Sodom fifty righteous men within the city, I will forgive the entire place for their sake.”‘

We are all sick of the rank self-serving political cesspool that is Washington D.C.

Let those who claim to serve the public good provide their proofs; it is time for us to judge them. And we will shame the guilty into submission and obscurity.

anon April 25, 2013 at 8:48 am
dead serious April 25, 2013 at 9:09 am

Is that from Pulp Fiction?

Master of None April 25, 2013 at 9:20 am

What makes you livid about our legislators?

At the top of my mind:
The recent gun control (non)vote
Decision to water down the Stock Act
Anything related to extending protection of intellectual property
Disingenuous budgetary policy
Partisanship on issues where a vast majority of the public agree

Brian Donohue April 25, 2013 at 10:05 am

It’s as if you’re suggesting that selfless public servants are motivated by the same crass calculations as the distasteful and money-grubbing private sector.

anon April 25, 2013 at 10:16 am

+1

“public servants”

If only.

Jan April 25, 2013 at 10:47 am

Yeah, who wouldn’t want to start suddenly paying for their insurance out of pocket with no increase in salary to make up the difference? That is a real gesture of selflessness.

Nylund April 25, 2013 at 11:16 am

I think any employer who said, “you’re no longer getting employer-sponsored health insurance and you’re not getting a raise to make up for the extra costs you’ll now face,” would face a brain-drain. You’re total compensation just took a huge hit. It’s tantamount to a giant pay cut. Yes, this will affect who wants to work for you.

Brian Donohue April 25, 2013 at 12:14 pm

So…an employee’s compensation reflects ALL of the costs of employing that person? See, y’all can think like small businessmen when it suits you.

Now, let’s take what we’ve learned here and apply it to wage stagnation theory, comparative public v. private compensation, minimum wage theory, etc.

Jan April 25, 2013 at 12:45 pm

Think like small businessman? What a weird comment. It’s like basic numeracy, dude. I don’t think you understand what the thread is about.
I guess you’re trying re-litigate the whole idea of a mandate and the ACA generally here?

Brian Donohue April 25, 2013 at 1:01 pm

Yeah, I jumped the tracks a bit there. Your reaction “Whoa, whoa, whoa, that healthcare benefit is part of my compensation” is correct and economically literate, but this fact is conveniently forgotten in other contexts, as I mentioned. Not by small businessmen, though, because the act of writing these checks is a recurring and salutary reminder of what it costs to employ someone. That’s all.

Rich Berger April 25, 2013 at 10:46 am

I used to follow the links to Klein’s commentary but came to see his “contributions” as just repackaging of propaganda.

E April 25, 2013 at 1:22 pm

Sadly, I think that says more about you than it does about Klein.

Yancey Ward April 25, 2013 at 2:13 pm

A commenter over on Megan McArdle’s site actually described him correctly “The Baghdad Bob of Obamacare.”

Dave April 25, 2013 at 2:30 pm

I’m assuming other commenters have had their fun with the notion of “brain drain” as it applies to Washington. But I have to ask, if the whole of the Congress is having these kinds of “quiet” talks, then why aren’t Republicans making hay out of them? Seems like a total win for them.

MotorBoatingSOB April 25, 2013 at 4:16 pm

Maybe they want the talks to succeed and the results to pass before doing so.

Dave April 25, 2013 at 6:50 pm

Yeah, I just read something like that at Reason. They said it would be something they could pummel democrats with forever – plus they’d get the boon of the exemption anyway. Pretty clever.

ThomasH April 25, 2013 at 4:57 pm

So maybe the coverage on the exchanges needs to be more generous. Would that not help us get away from linking health insurance coverage to employment? No one ever supposed that ACA might not need tweaking Or Congress could increase the pay of staffers

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