The long-running drama of Congress wriggling itself out of Obamacare jumped to the center of the national conversation thanks to—what else—a tweet from President Trump:
If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!
— Donald J. Trump (@realDonaldTrump) July 29, 2017
The usual liberal media suspects and Obamacare defenders reacted by flaunting their ignorance (real or feigned—I can never tell) of any such bailout existing. But the bailout at taxpayer expense for members of Congress is very real, worth about $12,000 per year to senators and House members who avail themselves of it, and utterly indefensible legally or politically.
When Congress was debating Obamacare, one of the persistent demands from the American people was that if Congress was redesigning health care systems for millions of others, they should subject themselves and their staff to their own handiwork. The demands worked, and before Obamacare passed the Senate in 2009, a provision was added, Section 1312(d)(3)(D), that requires members of Congress and their staff to buy health insurance through Obamacare exchanges.
Notably, unlike an earlier version proposed by Sen. Chuck Grassley in the Senate Finance Committee, the final Senate bill as enacted did not include any employer contribution. Grassley tried to add the employer contribution back via an amendment to the reconciliation sidecar bill in March 2010 that would have also required the president and the executive branch to go into the Obamacare exchanges, but his amendment failed to overcome a procedural objection.
So the Obamacare law terminated the coverage members of Congress previously had through the Federal Employee Health Benefit (FEHB) program, required them to sign up on the Obamacare exchanges, and provided no employer contribution. It put them in the exact same situation as the people, we’ve since learned, who were most severely financially squeezed by Obamacare: people who don’t have employer coverage and make too much money to qualify for subsidies. They would have a very strong, very personal incentive to fix the cost problem.
Well, they would have had a strong incentive—if they hadn’t been bailed out. After a little-noticed meeting with Senate Democrats in March 2013, Obama personally committed to bail Congress out of paying their own Obamacare premiums. (Congress could have changed the law, but that would have required a vote and political accountability. A deal with Obama was easier.)
Obama directed the Office of Personnel Management to issue a rule (78 Fed. Reg. 60653-01) purporting that Congress, which has thousands of employees, is a small business and therefore: “the DC Health Link Small Business Market administered by the DC Health Benefit Exchange Authority, is the appropriate SHOP from which Members of Congress and designated congressional staff will purchase health insurance in order to receive a Government contribution.”
Publicly, they claimed each individual House and Senate office would file as a small employer. But that was a lie. Instead, the House filed as one small employer and the Senate filed as one. Each claimed to have fewer than 50 employees. Then they signed up 12,000 people. We only know about the filings thanks to Freedom of Information Act litigation by Judicial Watch.
— Phil Kerpen (@kerpen) July 30, 2017
These filings are the smoking gun. This can all sound very complicated. But Congress pretending to be a small business is very simple. And it is impossible to defend a scheme that relies on blatantly false documents.
This fraud of instructing Congress to masquerade as a small business is the key to the bailout scheme, because if members of Congress and their staff had signed up for Obamacare under the individual exchange, they would have had to pay their own premiums. (The Internal Revenue Service has interpreted Obamacare’s market rules to effectively prohibit employer contributions toward individual market premiums.)
President Trump is absolutely right. Congress was bailed out of Obamacare, contrary to a provision of the law that terminated their employer coverage. He should direct the Office of Personnel Management to rescind the bailout rule and issue a new rule that conforms to the statute, and he should do it in front of a giant poster of the false documents.
If Congress thinks Trump is in the wrong to end their sweetheart deal, they can always vote their taxpayer-funded employer contribution back into effect—and face the political consequences.