If you’re puzzled why ObamaCare is so polarizing, consider how a law that’s ostensibly about fairness — health care for all — can be so unfair.
Favored groups like unions and some businesses have carved out exceptions for themselves, while the average American could see their hours cut or their job eliminated.
Perhaps the most frequently talked about, but also most widely misunderstood, dispensations is the one for Congress and its staff.
Despite the Internet shorthand, Congress is not “exempted” from ObamaCare. Still, Congress is being treated differently than millions of other Americans who stand to lose under ObamaCare.
Currently, congressmen and congressional staff participate in the Federal Employee Health Benefit Program, the same as any other federal employee. Since the federal government is technically their employer, the government pays roughly 75% of the cost of their insurance, $5,000-$10,000 per year depending on family size.
However, under an amendment to ObamaCare, sponsored by Sen. Charles Grassley (R-Iowa) and passed in 2010, Congress will be required to give up their FEHBP insurance and purchase a new plan through a health-insurance exchange. The idea was that Congress should be treated just like those ordinary working Americans who will be dumped from their employer’s plan and forced to shop on the exchanges. And, like many of those workers, Congress would, under normal circumstances, lose the employer contribution toward their insurance. As a result, they could expect to have to pay much more out of pocket for their insurance.
That’s exactly the circumstances other regular Americans are finding themselves in. The Congressional Budget Office estimates that as many as 11 million workers could be dumped by employers who choose to pay the penalty rather than the cost of insurance, and that’s the low estimate — the American Action Forum suggested that number could be as high as 35 million.
Last month, for example, Home Depot announced that it was dropping health insurance for some 20,000 part-time workers. Those mostly low-wage workers will now have to buy health insurance on their own through an exchange, without Home Depot covering the employer share of their premiums, meaning that even if those workers qualify for a federal subsidy, many will end up facing much higher costs.
But Congress has been saved from that fate. The White House Office of Personnel Management has ruled that the federal government should continue to pay the full employer share of premiums — despite the fact that such payments are not authorized in the health-care law. No doubt that’s a deal that Home Depot employees wish they had.
Republicans in the House included an amendment to the government funding bill currently being debated in Congress that would strip out Congress’ subsidy, but the Democratically controlled Senate has refused to consider it.
Of course, Congress is hardly the only group to be excused from ObamaCare’s rules on they type of insurance plans that they must provide to their workers.
For example, since the law passed in 2010, 780 companies and 451 unions have received exemptions from the law’s insurance regulations, most frequently “minimum loss ratios” (the proportion of premiums that must be paid in benefits, rather than in administrative costs) or bans on annual or lifetime benefit caps. Some 4 million workers fall under these waivers. Interestingly, while companies received 63% of the waivers, most were very small. In terms of the number of employees affected, more than 88% fell under union waivers.
Of course, what might be considered the largest ObamaCare waiver, was the president’s unilateral decision to postpone the law’s employer mandate until 2015. This creates a particularly troubling Catch-22 for workers. With ObamaCare driving up the cost of insurance, many employers may decide to take advantage of the delay and drop coverage for their workers, since they will no longer be penalized for doing so. Indeed, as noted above, many employers already have dropped coverage and many more are expected to.
But the law’s individual mandate remains in force. As a result, if an employer discontinues a worker’s coverage, it is the worker who could face a fine — er, tax — for not buying insurance. The worker will be able to buy insurance through an exchange of course, assuming that the federal government ever manages to get the websites working properly, but will now likely have to pay the full cost of his insurance (minus whatever government subsidy he or she receives). For most workers, that will be a big hit for the family budget. Especially since that worker won’t benefit from the special deal for Congress discussed above.
All of this brings us to the fight over funding the government. In addition to ending the special treatment for Congress and its staff, House Republicans have also called for a one-year delay in the individual mandate, matching the delay for employers. This too has been rejected by President Obama and Senate Democrats, bringing us to the current impasse.
One can easily debate the wisdom of Republican tactics, but in rejecting Republican demands, Democrats have made it all to clear that what they are calling for is: ObamaCare for thee, but not for me.
Michael D. Tanner is a senior fellow at the Cato Institute.