Why Congress Goes for the "Gold" When They Sign Up for Obamacare

Why Congress Goes for the "Gold" When They Sign Up for Obamacare


Republican lawmakers are getting hammered back home again for backing their leadership’s star-crossed bill to repeal and replace the Affordable Care Act, despite warnings that the legislation if enacted could leave as many as 24 million Americans without insurance in the coming decade, 14 million by choice. 

The $42.6 billion taxpayer-subsidized program known as Obamacare covered about 8 million people in 2017. But the Affordable Care Act's expanded Medicaid program for single, able-bodied adults has been more popular, especially in states where manufacturing jobs are no longer available. 

Irate voters, worried that the health care reform efforts of President Trump and House Speaker Paul Ryan (R-WI) would jeopardize their health care coverage, complained at town hall meetings during the current two-week recess that their representatives were leaving them in the lurch.

Related: How Republicans Got Trapped by Their Health Care Promises

Some resentful voters have also demanded to know who is paying for the health care insurance of members of Congress and their families and whether they stand to lose benefits if the current health insurance laws are dismantled by the GOP.

During a stormy town hall in Oklahoma last Monday, GOP Rep. Markwayne Mullin said, “I pay my own insurance,” as does every other member of Congress. “We got into the D.C. exchange and we personally have to pay for 100 percent of it,” he declared. “Not a percentage, all of it.”

Whether intentionally or otherwise, Mullin grossly misrepresented lawmakers’ health care benefits, which are far better than most Americans. One of the reasons Congress has one of the lowest approval ratings of any institution is the widespread conviction that lawmakers refuse to live by the rules they write for others – and this is certainly the case with regard to health insurance. 

Related: Scrambling to Save Their Health Plan, Republicans Consider a Major Change 

The original intent of the 2010 Affordable Care Act, among other things, was to require members of the House and Senate and many of their staffers to shift from the Federal Employees Health Benefit Program to the health-care exchanges in the District of Columbia, according to the Washington Post Fact Checker. The federal health program has long been popular with millions of employees because of its generous provisions, especially the fact that the federal government picks up 70 percent of the insurance premium.

Congressional leaders from both parties quietly grumbled that Obamacare would be a substantial step down for many lawmakers and staffers who earned too much money to qualify for federal subsidies and would have to pick up most or all of their premiums.

The new law was designed principally to provide coverage to Americans who had no previous coverage through their employers or private plan, which obviously didn’t describe the situation for members of Congress. Yet in passing the legislation in 2010, the Democratic-controlled Congress specified that all lawmakers and their staffs henceforth would have to get their insurance through the Obamacare.

Related: Why the House GOP Health Care Replacement Plan Is Collapsing

The Obama administration made an exception and created a carve-out for members of Congress and their staffs, which was ratified in 2015 as part of a congressional waiver. Rather than requiring lawmakers and staffers to enroll for coverage on the D.C. Obamacare exchange, the administration allowed them to use the D.C. small business exchange to receive health-care stipends.

The Small Business Health Options Program (SHOP) is an obscure health insurance market for small employers who want to provide affordable health and dental insurance to their employees. But to use the marketplace, the employer cannot have more than 50 full-time employees.

The Obama administration got around that by allowing individual congressional offices to be counted as small businesses of 50 or fewer employees. Moreover, congressional members and staffers who went this route were entitled to a premium subsidy of 72 percent from their “business” – the federal government.

Under this special deal, the 535 members of the House and Senate and tens of thousands of staff members were provided with “gold level” Obamacare coverage, with taxpayers picking up nearly three-quarters of their premiums. If the 535 members of Congress opted for the Gold Family Plan and had one child age 20 or under, the monthly premium would be around $1,000. The net annual cost to taxpayers would be around $4,622,400. Congress is smart to choose "Gold" because the higher the plan, the lower the deductibles.  

Some members have said they donate to charity an amount equivalent to the taxpayer-funded subsidy, according to The Washington Post, but others don’t. But those contributions are tax deductible, so that doesn't really come out of pocket. And because of a further twist in the rules, some staff members permanently assigned to committees and subcommittees are free to continue obtaining their coverage through the Federal Employees Health Benefit Program.