In a "sweetheart deal … members of Congress, thanks to the Obama administration, are going to be the only people in America to get subsidies in the Obamacare exchanges."
Jeb Hensarling on Tuesday, October 1st, 2013 in a House floor speech
GOP Rep. Jeb Hensarling assails "sweetheart" deal for lawmakers, staff under Obamacare
In the wee hours of the morning of Oct. 1, 2013, as the House was engaged in a futile ping-pong match over averting the federal government shutdown, Rep. Jeb Hensarling, R-Texas, took to the floor to decry a "sweetheart deal" on health insurance for members of Congress.
"Mr. Speaker," Hensarling said, "we are debating should members of Congress get a better deal than every other American in Obamacare? House Republicans say, ‘No, that’s not fair. That’s not equal protection under the law.’ Yet, our friends on the other side of the aisle (Democrats) are now saying, ‘No, no, no.’ They’re going to protect this sweetheart deal. ...
"Now members of Congress, thanks to the Obama administration, are going to be the only people in America to get subsidies in the Obamacare exchanges. Is this fair, Mr. Speaker? I think not. Clearly, the other side of the aisle wants to preserve this special deal for Members of Congress granted by the President of the United States."
Hensarling was referring to a provision of President Barack Obama’s health care law that was originally intended as a political maneuver by critics of the law. We asked his office for evidence to support his statement, but we didn't hear back.
When the health care law was being written in 2009 and 2010, Republicans proposed requiring that lawmakers and their staffers obtain insurance through the exchanges, arguing that if the law was good enough for ordinary Americans, then it was good enough for Congress.
Presumably fearing a public backlash if they refused, Democrats accepted the language, and it became part of the law.
The problem arose in the drafting of the law. For most Americans who have employer-based insurance, the employer pays a majority of the cost of insurance. But the version of the health care bill signed into law doesn’t include an explicit mechanism to allow the federal government to pay its employer share of congressional employees’ health insurance if they use the exchanges, now called marketplaces. (Here’s a rundown of how this drafting error occurred.)
Without a fix, congressional employees would have to foot the entire cost of their health insurance when buying insurance on the exchange -- a financial hit that could go well into the thousands of dollars. To fix this problem, the Office of Personnel Management, which serves as the federal government’s human resources office, issued a ruling that allowed the same money that would have been spent on the employer’s old health insurance to instead be spent on whatever they purchased on the Obamacare marketplaces.
Obamacare critics have portrayed this as a special exemption to protect politically connected lawmakers and staff, one that was unavailable to the public at large. So some lawmakers backed an effort by Sen. David Vitter, R-La., to revoke the employer’s premium cost-sharing for members of Congress, aides and other political appointees. As the House and Senate debated how to proceed to end the shutdown, passage of a funding bill with the Vitter Amendment attached was floated as a possibility.
So that’s the background. Getting back to Hensarling’s statement, we see four claims embedded in it:
Will members of Congress be "the only people in America to get subsidies in the Obamacare exchanges"? Hardly -- the tax credits commonly known as subsidies under Obamacare were being put into place starting Oct. 1, the same day the shutdown began. Anyone within a specified income range who purchases insurance on the Obamacare marketplace will be eligible for subsidies in the form of tax credits. The Congressional Budget Office has estimated that by 2017, about 24 million Americans will be buying insurance on the Obamacare marketplaces, many of them with federal subsidies. Only time will tell how many Americans eventually sign up, but it’s almost certainly going to be more than the roughly 30,000 people who work in the legislative branch.
Will Members of Congress even get "subsidies"? Not really. All lawmakers and many staffers won’t qualify for the subsidies we discussed above because their income is too high. Instead, what lawmakers and staff will qualify for is better described as employer cost-sharing -- an allotment of money that works exactly the same way as it does for the majority of Americans who get employer-based health care, and that long predated the beginning of the Obamacare exchanges. For Americans who have employer-sponsored health insurance, the employer pays a share of the premiums. In this case, that "employer" is the federal government.
Is this a "sweetheart deal"? Quite the opposite. Under the law as enacted, lawmakers and congressional aides are actually treated more harshly than any other American.
Obama and his allies created a system in which most Americans -- at least three quarters -- who have insurance will remain on their existing plans and see few if any disruptions. The marketplaces were created for Americans who lacked insurance entirely or had to buy insurance on their own, without employer assistance.
By contrast, the law revokes the longstanding congressional health insurance arrangement and forces them into a new system, something not done for any other class of employee.
Even the National Review, the conservative magazine that is none too fond of Obamacare, recently wrote that the provision treats lawmakers and staff "particularly badly." The situation "isn’t a ‘special handout’ for congressional employees. … People who happen to be paid by the federal treasury don’t deserve to have the entire value of their existing coverage stripped away, as almost no Americans will experience."
An added irony is that the Federal Employees Health Benefits Program is widely considered a key model for the exchanges themselves. Under the program, federal employees under the age of 65 can choose among a variety of health insurance offerings, just as people will be able to do under the exchanges. In 2003, the conservative Heritage Foundation published a paper touting the program as a model for market-based health care reform.
In short, the ability for congressional employees to keep their employer cost-share merely returns them to the already harsh provision that severs them from their existing health care plan. All the fix does is stop that provision from making even more trouble by forcing them to pay thousands of dollars more. We don’t think this qualifies as a "sweetheart deal."
Is this "thanks to the Obama administration"? The Obama administration isn’t entirely blameless -- in the rush to sign Obamacare into law, the president overlooked or ignored the problem looming in the legislative language, and his administration did approve the "fix."
Still, this controversy has been kept alive largely by Republicans, from the original Republican proposal to the Vitter amendment. So it’s at best a stretch to blame Obama.
Hensarling said that in a "sweetheart deal … members of Congress, thanks to the Obama administration, are going to be the only people in America to get subsidies in the Obamacare exchanges."
This statement is wrong in almost every regard. Millions of ordinary Americans who currently lack health coverage are expected to get Obamacare subsidies in the years ahead. Congressional employees who purchase insurance on the marketplaces won’t be getting subsidies so much as they will be benefiting from a traditional employer cost-share, as many other Americans do. Far from getting a "sweetheart deal," congressional employees would otherwise find themselves forced off their existing insurance plan, something the law itself does to no other employment group. And the issue has been largely driven by Republicans, not by the Obama administration.
That’s a lot to get wrong in the space of a sentence or two. We rate Hensarling’s comment Pants on Fire.