Is There Really A “Congressional Exemption” From Obamacare?

The news PPACA controversy appears to be based on a complete misunderstanding of one provision of the law.

United States Capitol Building, Washington, D.C. Aerial

One of the main talking points during last night’s back and forth between the House and Senate was the so-called Vitter Amendment which purports to strip from the Affordable Care Act an “exemption” provided to Members of Congress and Congressional staff that is not available to other Americans when it comes to the Affordable Care Act. Last night, Republican after Republican Member of the House cited the unfairness of Congress getting something that the average American wouldn’t be getting under the law. As a talking point, it’s likely one that resonates well. The only problem, as National Review’s Patrick Brennan points out, is that there really isn’t a “Congressional Exemption” at all. As Brennan explains, the whole issue has its origins in the fact that, unlike anyone else in America, Members of Congress and Congressional employees were forced onto the exchange via an amendment first introduced by Iowa Senator Chuck Grassley that he now says was vastly re-written from what he originally intended. Because of that mandatory exchange membership, though, Congressional employees were placed at a distinct disadvantage vis a vis other Americans:

The law thus treats Congress and its staff substantially differently than all other Americans. Many Americans who now get insurance coverage from their employer may end up having to go on the exchanges; but only congressional employees are actually forced onto them, with the option of an employer plan prohibited by law. In the private sector, some of the savings from ending employer plans can go to higher wages, which employees can use to buy insurance from the exchanges. (Though that contribution will probably be after-tax earnings, rather than the pre-tax premium contributions employers make now.) It’s possible there will be exceptions, but for the most part the market simply won’t allow companies to cut an employee’s compensation by as much as yanking away their entire employer health-care contribution amounts to.

While Trader Joe’s, for instance, is discontinuing its health-insurance plan for part-time employees, the company will be giving each of them $500 a year — which sounds like a pittance, but when it is combined with the subsidies that low-wage employees like these will receive, coverage on the exchanges will actually cost most employees less out-of-pocket than what they got from their employer. There will be no such substitution in congressional offices, because the amendment does not increase the budget for legislative salaries. Some congressional employees would receive tax-credit subsidies on the individual market, like low-wage workers, but most would not.

When you hear about a “congressional exemption” from Obamacare, this refers to the fact that the Office of Personnel Management, part of the executive branch, has chosen to make up for this differential treatment by paying part of congressional employees’ health-care premiums on the new exchanges. They haven’t been “exempted” from the amendment that forces them onto the exchanges, in a way no other American is.

OPM decided to contribute the same amount to these exchanges that the government now spends on congressional employees’ health benefits ($5,000 for individuals, $11,000 for families). This decision was probably illegal, since Congress didn’t authorize funds for the plan, as Cato’s Michael Cannon explains.

Congressmen and their staff, then, are getting a questionable workaround from the law — but it’s from a provision of the law that treated them particularly badly rather than neutrally. The net result of the law and the workaround isn’t a “special handout” for congressional employees.

So, the so-called “exemption” isn’t an exemption at all, but rather an effort to even the playing field between Congressional employees —- and there are some 16,000 of them not including Members of Congress and the Senate — and ordinary Americans. Doing this through the Office of Personnel Management is questionable legally, I agree, but calling it an exemption simply isn’t true. Additionally, it’s also untrue to suggest that Congressional employees are getting anything here that ordinary Americans wouldn’t be entitled to as well since there is nothing in the PPACA that bars private employers from providing a subsidy, in the form of additional salary, for employees that are being forced to go onto the health insurance exchanges. As Brennan notes, this is what Trader Joe’s is doing as, apparently, are other employees, most likely because the private employers believe it will be a money saver for them in the long run. Given this, the entire attempt to turn this into some kind of populist “us v. them” issue simply isn’t correct.

Of course, all of this goes back to an idea that has always resonated with the public, namely that Congress should be “forced to live” with the same laws that they pass for the rest of America. That’s an idea I can get behind, actually. However, in this case what happened, apparently because of bad law writing, is that Congressional employees have been placed in a situation where they are going to be treated worse than the rest of America because they would not be entitled to any kind of employer subsidy at all for insurance purchased via the exchange. In other words, they’d be punished for working for Congress. If that’s not an incentive for some of them to consider jumping ship, I don’t know what is.

Brennan wraps it up:

With the destructive effects of Obamacare looming, this punishment may sound appealing. But do we really approve of the idea in other circumstances? Do we believe that Congress and its staffers should pay the highest marginal tax rates, regardless of income; that every congressman must have served in the military to vote to declare war; that congressional offices have to carry out any and all reporting requirements and regulations they impose on a particular industry; and so on? There are probably better ways to prevent Congress from passing bad laws.

There is, it’s called holding them accountable at the ballot box.

FILED UNDER: Bureaucracy, Congress, Deficit and Debt, Health Care, US Politics
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed for too young in July 2021.

Comments

  1. Rob in CT says:

    Misunderstanding?

    No. Lie. The word you are looking for is lie. The “misunderstanding” is a deliberate one.

  2. lisa says:

    While we are leveling the playing field for Congressional staff, how about they be furloughed or not received raises the last two years. When regular federal employees had their pay frozen professional staff members received raises.

    I am a little bitter this morning as I sit here knowing I am not going to receive a pay check for today, while I have done my job; yet Congressmen will be paid for failing at their job.

  3. OzarkHillbilly says:

    @Rob in CT: Beat me to it.

  4. C. Clavin says:

    Blah, blah, blah, blah, blah, blah.
    Why not just tell it like it is?
    This all goes back to the original poison-pill effort of Grassley to try and embarrass Obama and undermine Obamacare…the Extremist Right-Wing Entertainment Complex latching onto…oooooh…..”a special exemption”…and Vitter, one of the dumbest members of a party full of stupid people (not to mention a man that must employ hookers to satisfy his “family values”).
    If Republicans simply took care of business there wouldn’t be this kind of BS…or it would be greatly minimized.
    But they are so f’ing twisted up by the disconnect between reality and their ideology that they cannot function without creating a huge cluster-f*ck.

  5. Pharoah Narim says:

    You mean that people that already have insurance get to keep what they have? That “exemption”….that’s available to EVERYONE? Clowns.

  6. Pharoah Narim says:

    I think its time for a rebrand of the Tea Party. Something that points to their future direction yet sticks a pointed object directly into the heart of the hate that drives their insane actions….

    Whiggers?

  7. Gavrilo says:

    That’s an idea I can get behind, actually. However, in this case what happened, apparently because of bad law writing, is that Congressional employees have been placed in a situation where they are going to be treated worse than the rest of America because they would not be entitled to any kind of employer subsidy at all for insurance purchased via the exchange. In other words, they’d be punished for working for Congress. If that’s not an incentive for some of them to consider jumping ship, I don’t know what is.

    No one is entitled to an employer subsidy. Trader Joe’s and other companies may provide subsidies for employees that they are dumping onto the exchanges now, but they are not entitlements. Trader Joe’s can stop doing that whenever it chooses. Second, what happens when the low-income employee who qualifies for all the goverment subsidies is no longer so low-income? He loses his government subsidies and pays more out of pocket. And, if he’s lucky, the $500 he gets from Trader Joe’s covers one month’s insurance premium for his family.

    Real people are getting screwed here. Especially lower income people who never had employer-based health insurance to begin with. Not only are they forced to buy insurance (without any employer subsidy) because of the individual mandate, they are having their hours cut and making less money.

  8. mantis says:

    , the whole issue has its origins in the fact that, unlike anyone else in America, Members of Congress and Congressional employees were forced onto the exchange via an amendment first introduced by Iowa Senator Chuck Grassley

    Yet another “scandal” created by Republicans so they can point the finger elsewhere. “Get angry about the thing I just did, but blame that guy!” Scumbags.

  9. liberal capitalist says:

    @Pharoah Narim:

    Whiggers?

    Damn. That is funny.

    Laughed right in my coffee.

  10. OzarkHillbilly says:

    @Gavrilo:

    Real people are getting screwed here. Especially lower income people who never had employer-based health insurance to begin with.

    That’s funny, all the “real people” I know aren’t feeling so bad about being able to buy health insurance with a gov’t subsidy because their employers are too greedy to do the right thing to begin with. Funny how these employers get a free ride in your guilt parade.

  11. C. Clavin says:

    So Gavrillo…
    I take it you whole-heartedley endorse the status quo…with millions not having any insurance at all…one in 10,000, according to some estimates, dying due to a lack of insurance…and real people like me paying more every month to subsidize free-loaders on the system?

  12. Ken says:

    Is There Really A “Congressional Exemption” From Obamacare?

    Short answer: No.

    Longer answer: Nooooooooooooooooo

    Much like discussions involving Creationism, we have, perhaps inevitably, come to that place where the proponents of a particular idea can reasonably said to be either 1) willfully ignorant; 2) shameless liars; or 3) both.

    in my experience there is no fourth option.

  13. al-Ameda says:

    There is no new “controversy” over ACA. There is permanent “controversy” creating establishment surrounding ACA – it is known as the Republican Party.

  14. Bob @ Younstown says:

    National Review and others have said:

    Many Americans who now get insurance coverage from their employer may end up having to go on the exchanges …”

    Can someone explain the circumstances under which an employee, who IS covered by an employer sponsored plan, would be forced to go to the exchange?

    My impression is that the only persons “forced” into the exchanges is Congress and Staff and those persons who are NOT covered by a qualified insurance plan.

  15. john personna says:

    @Gavrilo:

    And, if he’s lucky, the $500 he gets from Trader Joe’s covers one month’s insurance premium for his family.

    You can google the original Trader Joe’s ACA letter online. They ran the math. Their plan improves conditions for their employees. There is a net benefit.

  16. john personna says:

    @Bob @ Younstown:

    There’s the Trader Joe’s letter, it shows a good working example.

  17. Grumpy says:

    @Bob @ Younstown: Insurance companies have totally pulled out of several states, leaving their clients no choice except to disobey the law- to go into the exchanges, in some states that affects millions..

    Home depot just dropped coverage for 20,000 forcing them into the exchanges..

    Missouri’s largest hospital chain, something like 14 hospitals, isn’t going to accept Obamacare.

    We have no idea how many private doctors will decline it- I’ve seen some reports indicating many think it wiser to close shop, than to accept Obamacare.. That is the case in Canada

  18. Gustopher says:

    @john personna: and, that’s an example of the employer forcing the employees to go on the exchanges.

    Of course, by Republican logic, that’s not even forcing anyone to do anything, since the employee can always leave and get another job, which are apparently plentiful.

  19. Gavrilo says:

    @C. Clavin:

    No. We already had a health insurance program for low income people. It’s called Medicaid. You want to insure more people? All Congress had to do was increase the income threshold. Millions of uninsured people could have been insured almost overnight. And, we wouldn’t be seeing companies dropping coverage for employees, cutting hours, and not hiring because of the mandate.

  20. john personna says:

    @Grumpy:

    Missouri’s largest hospital chain, something like 14 hospitals, isn’t going to accept Obamacare.

    What does that even mean? You know that Obamacare is commercial insurance right? Bought either in employer group plans, individually, or through exchanges.

  21. john personna says:

    @Gavrilo:

    So would you be willing to tie those together now? Should congress enact a Medicaid expansion?

  22. Pinky says:

    @john personna: I think (not sure) that they’re not going to accept any of the insurers who are participating in the state’s exchange.

  23. David in KC says:

    @Grumpy: you are completely off base. All the ACA does is mandate insurance and set up exchanges for people to better evaluate and purchase insurance. Unless the hospital chain is going to stop taking blue cross, united, etc, they are accepting patients that have insurance from the exchange. If our idiot state would have allowed the state health dept to get ahead of the curve and get good information about the program to the citizens, you wouldn’t be spreading blatant inaccuracies.

  24. David in KC says:

    @Pinky: considering who is participating in the exchange, they would also have to dump the employees from most of the major employers in the state.

  25. john personna says:

    @Pinky:

    That would be really weird and … well cruel.

    Bob has Blue Cross, and has had for 10 years. Blue Cross signs on to the exchange.

    Sorry Bob, no treatment.

  26. David in KC says:

    And a quick google search comes up with nada. There is a chain of hospitals down in Springfield that will no longer be hiring new employees if they test positive nicotine. Beyond that, unless someone can provide a link, more misinformation from the right.

  27. David in KC says:

    @john personna: there was a Medicaid expansion, though not in my state.

  28. rudderpedals says:

    Not accepting any coverage provided through an exchange is an F350 full of horse crap. How about moving onto something more plausible and not so easily dismissed as the third hand ravings of a talking point spewer?

  29. Gavrilo says:

    @john personna:

    Yes. I believe that a very large percentage of the uninsured go uninsured because they make too much for Medicaid, but not enough to afford coverage.

  30. john personna says:

    @Gavrilo:

    OK, if you are saying that it shouldn’t just be Obamacare repeal, but also other changes to improve care relative to the pre-Obama norm, that’s a contribution.

    The problem with the Republican plan is that it does not offer those kinds of changes, it simply attempts a roll-back.

    And a roll-back is something that the vast majority of Americans oppose.

  31. Rafer Janders says:

    @Pinky:

    I think (not sure) that they’re not going to accept any of the insurers who are participating in the state’s exchange.

    What you think is false. The major insurers (Aetna, Blue Cross/Blue Shield, United Healthcare, etc.) will all be participating in Obamacare. If these hospitals aren’t going to be accepting these insurers, then they’re not going to be accepting anyone, and will have to operate on a cash-only basis.

    Which, obviously, isn’t what’s actually happening. You don’t understand the law. Please read up on it (on a reputable site) before you come back here to comment.

  32. rudderpedals says:

    @Gavrilo: In states with thoughtful governments medicaid is extended to 400% of the poverty line, extending healthcare to many who lacked it because they made a bit too much.

  33. Rob in CT says:

    There have been a number of posts in this thread that illustrate the consequences of one of our two major political parties lying, constantly, about everything.

    Some people – the gullible, the ideologically predisposed, etc – believe those lies, and spread them. And pretty soon millions of people “know” things that simply aren’t so.

    Then, when people try to sit down and deal with our problems, we find we’re not actually inhabiting the same universe.

    Sadly, the resulting dysfunction does not harm both parties (or at least it’s seriously skewed toward the Dems). The GOP is the party of “government sucks” and so when it does, in fact, suck, they can say “see!” That they are the main reason it sucks in many instances usually takes too long to explain to people (if they are persuadable at all).

  34. Woody says:

    One of the perks in watching “Fox and Friends” at 5AM CST (when my gym opens) is the opportunity to watch the various right wing jingles and catchphrases get tried out before they hit the Big Time of Fox’s evening lineup.

    Betsy McCaughey, no stranger to anyone paying attention, was all over this one, calling it a “benefit that the President secretly put into place that Republicans opposed but Democrats insisted upon.”

    I’ve got to admit, her chutzpah made me laugh out loud. I probably won’t be laughing when this malarkey gets parroted by Limbaughts (and promoted by POLITICO).

  35. rudderpedals says:

    @Woody: I wish Betsy a long and healthy life, in a pain amplifier.

  36. Ken says:

    @Rob in CT: That whole schtick is nothing new. Just think about how many people actually still believe the “Clinton Death List” or the “fact” that Clinton was “offered Osama Bin Laden’s head on a silver platter, but he turned it down”

  37. Pinky says:
  38. David M says:

    @Pinky:

    Some, but not all of the plans on the exchange don’t have agreements with every provider. That’s not what the earlier claims said, and not news.

  39. john personna says:

    @Pinky:

    OK, so that’s basically backwards from what Grumpy told us. Instead of these hospitals “not accepting” Obamacare, they are just part of a different insurance network.

    You can buy from the exchange or you can buy from them.

  40. Bob @ Younstown says:

    @Grumpy:

    Home depot just dropped coverage for 20,000 forcing them into the exchanges..

    The consequence of that action (by Home Depot) is that their employees are no longer on an employer sponsored plan.

    I would still like to see an example of an employee who IS on an employer sponsored plan being forced to use the exchange.

  41. David M says:

    Home Depot did not* provide health insurance to part time employees, but now the part time employees can get insurance on the exchanges. This is an example of Obamacare working as expected and designed, and it is a positive development for those employees that did not have coverage.

    *Home Depot provided a “health liability benefit” but it was not health insurance.

  42. Gavrilo says:

    @john personna:

    But, the solution depends upon the goal. If the goal was to insure the uninsured, Obamacare is a terrible solution. It’s not a hypothetical anymore. Real people who had decent employer-based healthcare are losing it. Real people are losing income because their hours are being cut. And, it’s not as if this was unforseen.

  43. Pharoah Narim says:

    @Grumpy: @Gavrilo: Ladies and Gents… I present to you–the “Whigger”. Standard bearers for a dying faction whose non-sensical arguments barely veil the real object of their displeasure: The audacity of (first) Democrats and (foremost) Non-whites to establish and affect policy the guides future generations of America society. Their answer to American need to stay competative in a new century and new world? –LET IT BURN!

  44. David M says:

    @Gavrilo:

    Actual, credible link to the people with decent health care losing it please. The employer mandate doesn’t take effect until 2015, so no one is getting their hours cut yet.

  45. Pharoah Narim says:

    @Pinky: Someone will. That’s how markets work. Supply (services) will always meet demand (paying customers)–thats why the drug trade continues to fluorish despite being illegal. If a hospital corporation wants to cede business by default to their competition…let em! Why do you hate the free market?

  46. Bob @ Younstown says:

    @David M: Thanks for the clarification Dave

  47. beth says:

    @john personna: What’s the difference from what we have now anyway? My husband’s company switched to a new insurance company about 6 years ago and a few of our doctors weren’t included on the plan. We had to switch one or two and pay out of pocket for the one we really liked. If you have employer paid insurance you’ve always been at risk of having your provider taken out of your network. This is not an earth shattering change.

  48. john personna says:

    @beth:

    That’s true, and it’s an odd thing for free market types to complain about.

  49. Rob in CT says:

    @beth:

    Right, exactly. This sort of thing happened in the beforetime too. I’ve had it happen, though with our dentists (two in a row – in network the first year and then boom, out of network the next) thankfully not doctors, though there was a close call recently.

    It’s just another example of how some folks will spin anything negative that happens in the world of healthcare from now on as being because of the ACA.

  50. anjin-san says:

    Trader Joe’s

    Trader Joe’s customers like Trader Joe’s. A lot. Good will like that, It’s a real asset to the company.

    Don’t think they are going to flush that to save a few bucks on health care costs.

  51. Brad Ward says:

    “There are probably better ways to prevent Congress from passing bad laws.” -National Review’s Patrick Brennan

    “There is, it’s called holding them accountable at the ballot box.” – DOUG MATACONIS

    Patrick Brennan and Doug Mataconis are a couple of lying media shills! Congress has killed off industry and outsourced jobs from America with brilliant legislation like NAFTA, and CAFTA that actually gave tax incentives to industries to relocate overseas! With the removal of millions of jobs from the country many Americans find themselves dependent on welfare programs from the government to get by. Now, these two pathetic, used car salesmen would have us believe that the millions of dependent Americans will now, effectively vote to cut off the only remaining help that they have by firing their congressional representatives??? May God strike you both down for lying to the American people!

  52. Brad Ward says:

    @john personna: So, where does the “free market” part come in with ACA? What is “free market” about being forced to buy crappy government insurance???

  53. Brad Ward says:

    @Pharoah Narim: This is not “free market.” This is just more government interference in the market.

  54. Brad Ward says:

    @David M: Wrong! People are already getting their hours cut. Apparently, we don’t live in the same country.

  55. Brad Ward says:

    @David M: Wrong! It’s Day 4 and you can’t even get on the exchanges.