The Affordable Care Act (ACA), popularly known as Obamacare, included language mandating that members of Congress and their staff buy their now-mandated health insurance plans through a government exchange.
The laws says: “Notwithstanding any other provision of law, after the effective date of this subtitle, 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).” (See Section 1312(d) of the law)
Americans in the private sector who buy health insurance through the Obamacare exchanges only get a federal subsidy (a tax credit) if their income/family situation is below 400% of poverty, the ceiling for which is $94,200 for a family of four.
If they surpass that 400% level, then no subsidy. Theoretically, a family bringing in $174,000, like a member of Congress, would have to have 12 children dependents to even be eligible for a subsidy under the Obamacare rules. (See Federal Poverty Guidelines.pdf )
Under the OPM deal arranged in August, the average member of Congress who makes $174,000 a year will be able to keep his approximately $10,000 health insurance subsidy, like he used to get under his old plan, before Obamacare. Congressional staffers who buy through the exchange will also get to keep the subsidies they were receiving. (See Congress Salary CRS Report.pdf)
Before Obamacare, Congress’ plans were administered by the Federal Employee Health Benefits Program (FEHBP) and the government paid a yearly contribution to those plans of $4,966.80 for singles and $10,048.76 for families.
The Obamacare law was supposed to eliminate that FEHBP subsidy but the OPM essentially put it back in.
Here are two hypothetical examples of families buying health insurance, under the current rules, through the Obamacare exchanges: 1) a family of four – two adults both age 58, and two children under age 21 – living in D.C. who run their own small business; and 2) a female member of Congress, age 58, with a spouse and two children living in D.C.
Using the Kasier Family Foundation Subsidy Calculator, the D.C. family of four making $94,250 a year, or just $50 above the 400% of poverty level, would pay $15,481 a year for their family health plan if they chose the silver plan (the middle-tier plan used by Kaiser). They would receive $0 in subsidy.
The congresswoman and her family living next door makes $174,000. Her income is 739% of poverty level and her insurance plan, at the Silver level, would also cost $15,481. But the congresswoman would qualify for a subsidy of $10,048.76.
(The Kaiser calculator uses the Silver tier plan for its calculations and the OPM rule requires Congress to purchase at the Gold tier, but the federal subsidies are applicable to either tier plan: Gold, Silver, Bronze.)
Unlike the D.C. family that gets no tax-credit subsidy under Obamacare, the member of Congress gets more than $10,000 because of the deal arranged among the congressional leadership, the White House, and the OPM in early August 2013.
Congressional staff members would also qualify for subsidies even if their income exceeds the 400% of poverty level.
It is one set of subsidy rules for the electorate, and a different set of subsidy rules for those who work in Congress.
This deal came about, reported Politico, because House Speaker John Boehner (R-Ohio) worked with Senate Majority Leader Harry Reid (D-Nev.), House Minority Whip Steny Hoyer (D-Md) and others, in communication with the White House, to put pressure on OPM to issue a new memo about the subsidies. Also, behind closed doors with Democrats, President Obama reportedly said he was personally involved in solving the problem.
The OPM started working on a rule about the issue that was finally put into the Federal Register on Oct. 2.
Part of the OPM’s Final Rule says, “Because a Government contribution is, in essence, an employer contribution, the final rule clarifies that Members of Congress and designated congressional staff must enroll in an appropriate SHOP as determined by the [OPM] Director in order to receive a government contribution.”
The "contribution" is the subsidy.
“SHOPs are designed to provide employer-sponsored group health benefits and are, therefore, the appropriate environment in which to provide an employer contribution to Members of Congress and congressional staff,” reads the Rule.
“Given the location of Congress in the District of Columbia, OPM has determined that the DC SHOP, known as the DC Health Link Small Business Market administered by the DC Health Benefit Exchange Authority, is the appropriate SHOP from which Members of Congress and designated congressional staff will purchase health insurance in order to receive a Government contribution,” reads the Final Rule.
In order to get the subsidy, then, Congress and “official office” staffers must buy health insurance through the DC Health Link. In addition, according to a Fact Sheet from OPM, “For plan year 2014, Members of Congress and designated congressional staff will choose from 112 options in the Gold Metal tier on the DC SHOP. … Coverage will be effective January 1, 2014.” (See Fact Sheet OPM.pdf)
Oddly, Congress, which spent $3.5 trillion in 2012, is required to buy health insurance through a “Small Business Market” exchange.
The OPM rule states that members of Congress and their designees have the authority to decide which congressional staffers are “designated” and thus eligible to receive a “Government contribution,” i.e., subsidy. In the Obamacare law, these staffers are called “official office” staff. The determinations were to have been made by Nov. 1, 2013.
As the rule states, “OPM continues to believe that individual Members or their designees are in the best position to determine which staff work in the official office of each Member. Accordingly, OPM will leave those determinations to the Members or their designees ….”
Sen. David Vitter (R-La.) said the OPM rule is “clearly, unequivocally illegal because it’s in direct conflict with the language of the statute,” the Affordable Care Act.
“Even though the statute says clearly that every member of Congress and all official congressional staff go to the exchange,” said Vitter, “the draft rule says, ‘Well, we don’t know what ‘official staff’ is, so we’re gonna’ leave that up to every individual member of Congress to decide who on his or her staff is official staff for purposes of this provision. We’re never gonna’ second guess them.”
“That’s not in the statute [Affordable Care Act] at all, that’s contrary to the statute, the letter, the law, the spirit, that’s completely contrary,” Vitter said.
The senator has introduced an amendment that would take away the federal subsidy for those making above the income/poverty levels stipulated in the Affordable Care Act, and would require President Obama, Vice President Joe Biden, and political appointees, in addition to Congress and their staff, to get health insurance through the Obamacare exchange. They would have to follow the same rules as Americans in the private sector who buy through the exchange.
Senate Minority Leader Mitch McConnell (R-Ky.) supports the Vitter amendment (S. 761). When asked about it on Bill Bennett's Morning in America show in late September, McConnell said, "I certainly do" support the amendment, and added, "I don't think that members of Congress ought to be treated any differently in any way from anybody else in America. We should not get any carve-outs from Obamacare. I'm totally opposed to any preferential or special treatment for members of Congress when it comes to Obamacare."
Robert Moffit at Heritage explained that the Affordable Care Act did not give OPM “regulatory authority to implement” the law, and the law “did not provide for any additional subsidy for members of Congress and staff enrolled in the exchanges.”
Yet, “[u]nder pressure from the White House, on Aug. 7, 2013, OPM gave Congress and staffers the special taxpayer subsidies anyway,” said Moffit. “They are, in fact, ‘special’ since there is no congressional authorization for the Obama administration to provide them.”
In an e-mail to CNSNews Moffit said, “I believe this memo will be challenged in court when it goes into effect. …The OPM [has always] been conscientious in upholding the civil service laws, rules and regulations that protect the integrity of the merit system against politicization or twisting statutes for narrow political purposes. I hate to see [the civil service] being abused like this.”
Michael W. Chapman contributed to this report.