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Can A Wisconsin Senator And A Superstar Lawyer Prevent Members Of Congress From Gaining Subsidized Health Insurance Under Obamacare?

Can A Wisconsin Senator And A Superstar Lawyer Prevent Members Of Congress From Gaining Subsidized Health Insurance Under Obamacare?
Photo Credit: Forbes

This week, Wisconsin Senator Ron Johnson (R.) filed a lawsuit aimed at preventing members of Congress, and their staffers, from receiving subsidized health insurance through Obamacare’s exchanges. “Americans are justifiably outraged when members of Congress exempt themselves from the very laws they impose on everyone else.” Sen. Johnson is right to be concerned about some of the legal acrobatics that the Obama administration is going through to ensure that Congress gets subsidized coverage. Will the courts side with him? It’s far from certain.

Obamacare is silent on the question

As a reminder, Section 1312(d)(3)(D) of the Affordable Care Act requires that “the only health plans that the Federal Government may make available to Members of Congress and congressional staff [are those that are] created under this Act…or offered through an Exchange established under this Act.”

Before Obamacare, these individuals participated in the Federal Employees Health Benefits Program (FEHBP), under which around three-fourths of the premium cost is subsidized by the government. But the Affordable Care Act is silent on the question of whether or not these subsidies can be applied, under 1312(d)(3)(D), to the plans congressmen and staffers must now buy. If the plans can’t be subsidized, it amounts to a pretty significant pay cut for staffers, especially for those at the lower end of the pay scale. So many congressmen have quietly sought to ensure that the Obama administration agrees to reroute the old FEHBP subsidies through the exchanges.

We’ve covered the topic of this attempted congressional “exemption” extensively at The Apothecary: the history of how this provision found its way into the law; efforts by Republicans to force all federal employees to eat their own exchange cooking; Democratic complaints that the provision is unfair; and the eventual ruling by the Office of Personnel Management that members of Congress could, in fact, reroute their FEHBP subsidies through the exchanges.

Paul Clement is on the case

Johnson is joined in his lawsuit by a high-powered ally: Paul Clement, the superstar former U.S. Solicitor General who argued the Obamacare constitutional challenge before the Supreme Court in 2012. Rick Esenberg of the Wisconsin Institute for Law & Liberty is also working with Sen. Johnson.

Clement said he joined the case because, unlike many of the other Obamacare improvisations we’ve seen this year, there are plenty of people in this case with the legal standing to sue the government. “What we think gives somebody…standing to raise an objection is that…this is not an abstract concern. This is a provision that specifically affects how Senator Johnson and his office get their health care; it affects how the Senator classifies employees within his office.”

The problem is that the provision wasn’t written clearly. It’s silent on the question of whether or not the government can offer congressmen subsidized coverage in the Obamacare exchanges. The Congressional Research Service, Congress’ in-house think tank, looked into the legal ins and outs in 2010 and concluded that the Obama administration did have the legal authority to subsidize coverage. “It seems the section may provide the authority for the federal government to make a contribution to the health insurance premiums of Members of Congress and congressional staff,” CRS wrote.

There are oddities regarding the way in which OPM implemented this provision. The exchanges are meant for individuals and small employers; Congress is neither. But it’s hard to see where the provision specifically prohibits the ability of the government to subsidize Congress’ health insurance through the exchanges.

Republicans must tackle Obamacare’s core problems

If the American public doesn’t want its Congressmen to have subsidized coverage under Obamacare, Congress should pass a law making that clear. Indeed, Louisiana Sen. David Vitter (R.) has introduced legislation to do just that. But the Democratically-controlled Senate won’t bring it up for a vote, and neither will the Republican-controlled House.

It will be useful for members of Congress and their staffs to enroll onto the exchanges and see what kind of health coverage tens of millions of Americans will receive on them. But I’d love to see Sen. Vitter—or anyone else—introduce a bill that would address the steep rate hikes that millions of Americans will face with their health insurance premiums.

There’s a reason why Republicans haven’t done that. Making substantial changes to Obamacare—the kind that would bring costs downward—involve tradeoffs. Some people would get to pay less for insurance while others would pay more. And the GOP, at least for now, has no interest in pushing bills that aren’t supremely popular.

At the end of the day, if Republicans are serious about repairing our flawed and bankrupt health-care system, they are going to have to bite the bullet. Allowing younger people to buy more affordable insurance, for example, means that many old people—in the short term—would pay more. And old people vote Republican.

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Read Avik’s new book, How Medicaid Fails the Poor (Encounter, 2013), available at Amazon and other major retailers.

Follow @Avik on Twitter, Google+, and YouTube, and The Apothecary on Facebook.

Or, sign up to receive a weekly e-mail digest of articles from The Apothecary.

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INVESTORS’ NOTE: The biggest publicly-traded players in Obamacare’s health insurance exchanges are Aetna (NYSE:AET), Humana (NYSE:HUM), Cigna (NYSE:CI), Molina (NYSE:MOH), WellPoint (NYSE:WLP), and Centene (NYSE:CNC), in order of the number of uninsured exchange-eligible Americans for whom their plans are available.

Source: Forbes

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