This week, the Senate will likely consider a package of several appropriations measures. The legislation provides an opportunity for senators to offer, and possibly vote on, an amendment defunding the District of Columbia’s new health insurance mandate.
Because such an amendment, proposed by Rep. Gary Palmer (R-AL), passed in the House last week, if a similar amendment passes the Senate, it would almost certainly remain in the final version enacted into law. As a result, residents of the nation’s capital would not face the threat of having their property seized if they cannot afford to purchase “government-approved” health insurance.
The Senate can and should go further. It should pass appropriations language prohibiting spending any funds on Obamacare subsidies in states whose exchange heads do not enroll in exchange coverage themselves. As with the principle that members of Congress should enroll in the exchanges, so too should the CEOs running them.
A Firsthand Display of Hypocrisy
I have seen up close how the heads of exchanges do not purchase exchange coverage. In the fall of 2016, CareFirst Blue Cross cancelled my exchange insurance policy, in part due to regulations promulgated by the District’s exchange authority.
To find out the reasons for the cancellation, I attended a meeting of the authority board. When I asked whether employees of the exchange purchase exchange coverage themselves, Mila Kofman, the exchange’s director, responded that doing so would cause employees to forfeit their employer insurance subsidy, making coverage unaffordable.
That explanation makes sense for junior employees making $40,000, $60,000, or even $80,000 annually. But it seems much less justifiable for Kofman. Kofman did not disclose it at the meeting I attended, but I later learned through DC public records that in 2016, she received a salary of more than $217,000—more than Mayor Muriel Bowser herself.
In 2016, I reported $77,696 in adjusted gross income on my federal tax return. As an entrepreneur trying to start a small business, I find it offensive that someone making nearly three times my income refused to purchase exchange coverage, claiming the necessity of an additional subsidy—funded by the tax dollars of me and other District residents, of course.
If Kofman cannot, or will not, purchase the exchange plans she sells without a subsidy, why would she, and the exchange board, support requiring residents making a fraction of her income to do so, and punishing them with taxes—and the threat of property seizure—if they do not?
‘1 Percenters’ Won’t Buy Exchange Coverage
Nor do the double-standards remain confined to the District of Columbia. The head of California’s exchange receives a salary putting him in “the 1 percent,” yet refuses to purchase the plans he sells.
I had previously recounted how Peter Lee, Covered California’s executive director, admitted to me at a briefing that his health insurance coverage comes through California’s state employee plan—at taxpayer expense, of course. Yet Covered California’s website lists his current monthly salary at a rate of $36,400, or a whopping $436,800 per year.
A study of income data released by the liberal Economic Policy Institute just last week said that a household needed income of $421,926 to qualify as a member of the “1 percent.” Lee therefore qualifies as a “one-percenter” based on his salary alone, to say nothing of the bonuses he has received in years past, which themselves exceeded many families’ entire annual income.
With all that money, does Lee really need to have taxpayers fund his health benefits as well? Does he think the policies Covered California sells so unaffordable, or so poor in quality, that he refuses to buy them? Or does he just feel entitled to have taxpayers fund his benefits on top of his fat paycheck because he thinks he’s better than we are?
The Amendment Concept
In theory, the Trump administration could have solved this problem months ago, by issuing regulations requiring all CEOs of state-run exchanges—and, for that matter, their board members too—to purchase plans from the exchanges. If those individuals consider exchange plans so inferior or unaffordable that they will not purchase them for themselves, then they have no business selling them in the first place.
(In case you were wondering, yes, I do believe that at the federal level, the U.S. secretary of Health and Human Services and Centers for Medicare and Medicaid Services administrator should buy exchange plans. I previously criticized former CMS Acting Administrator Andy Slavitt for failing publicly to disclose that he held exchange coverage during a Democratic administration, and I would be remiss not to point that out under a Republican one.)
But if the Trump administration won’t act, Congress certainly can. In the Treasury section of the appropriations bill the Senate will consider, it could add language prohibiting the use of funds for any state whose exchange head fails to purchase exchange coverage. (The language would reside in the Treasury section of the bill because Obamacare funnels its exchange subsidies through the tax code as refundable tax credits.)
At that point, people like Mila Kofman and Peter Lee will have a choice to make. They can determine whether they care more about keeping their taxpayer-funded health insurance benefits, or ensuring their constituents continue to have access to insurance subsidies. In short, they can choose whether they will finally put their principles ahead of their own pocketbooks—which they should have been doing all along.