On Saturday evening, incoming U.S. representative and self-proclaimed “democratic socialist” Alexandria Ocasio-Cortez took to Twitter to compare her prior health coverage to the new health insurance options available to her as a member of Congress:
In my on-boarding to Congress, I get to pick my insurance plan.
As a waitress, I had to pay more than TWICE what I’d pay as a member of Congress.
It’s frustrating that Congressmembers would deny other people affordability that they themselves enjoy. Time for #MedicareForAll.
— Alexandria Ocasio-Cortez (@Ocasio2018) December 1, 2018
It shouldn’t shock most observers to realize that Congress gave itself a better deal than it gave most ordinary citizens. But Ocasio-Cortez’ complaints about the lack of affordability of health insurance demonstrate the way liberals who claim to support Obamacare’s pre-existing condition “protections”—and have forcibly raised others’ premiums to pay for those “protections”—don’t want to pay those higher premiums themselves.
She’s Paying the Pre-Existing Condition Tax
I wrote in August about my own (junk) Obamacare insurance. This year, I have paid nearly $300 monthly—a total of $3,479—for an Obamacare-compliant policy with a $6,200 deductible. Between my premiums and deductible, I will face paying nearly the first $10,000 in medical costs out-of-pocket myself.
Of course, as a fairly healthy 30-something, I don’t have $10,000 in medical costs in most years. In fact, this year I won’t come anywhere near to hitting my $6,200 deductible (presuming I don’t get hit by a bus in the next four weeks).
As I noted in August, my nearly $3,500 premium doesn’t just fund my health care—or, more accurately, the off-chance that I will incur catastrophic expenses such that I will meet my deductible, and my insurance policy will actually subsidize some of my coverage. Rather, much of that $3,500 “is designed to fund someone else’s medical condition. That difference between an actuarially fair premium and the $3,500 premium my insurer charged me amounts to a ‘pre-existing conditions tax.’”
As a 29-year-old in presumably decent health, Ocasio-Cortez also pays a pre-existing conditions tax. She pays more in premiums—which by her own account she has difficulty affording—so that older and sicker people, including people who did not purchase coverage before they came down with a pre-existing condition, can pay less.
Millions of People Can’t Afford Coverage
Because I work for myself, I don’t get an employer subsidy to pay the pre-existing condition tax. (I can, however, write off my premiums from my federal income taxes.) Ocasio-Cortez’s tweet referred to her coverage “as a waitress,” but didn’t specify where she purchased that coverage, nor whether she received an employer subsidy for that coverage.
However, a majority of retail firms, and the majority of the smallest firms (3-9 workers), do not offer coverage to their workers. Firms are also much less likely (only 22 percent) to offer insurance to their part-time workers. It therefore seems likely, although not certain, that Ocasio-Cortez did not receive an employer subsidy, and purchased Obamacare coverage on her own. In that case she would have had to pay the pre-existing condition tax out of her own pocket.
That pre-existing condition tax represented the largest driver of premium increases due to Obamacare, according to a March paper published by the Heritage Foundation. Just from 2013 (the last year before Obamacare) through 2017, premiums more than doubled. Within the last year (from the first quarter of 2017 through the first quarter of 2018) roughly 2.6 million people who purchased Obamacare-compliant plans without a subsidy dropped their coverage, likely because they cannot afford the higher costs.
When in 2016 Bill Clinton called Obamacare the “craziest thing in the world,” he was talking about people who have to pay the pre-existing condition tax themselves. Obamacare provides income-based subsidies for coverage, but only to people with incomes under four times the federal poverty level, or $48,560 for an individual. Individuals making just above $50,000 don’t receive any subsidy, and would have to pay the pre-existing condition tax on their own.
Lawmakers Get an (Illegal) Subsidy to Avoid That Tax
Unsurprisingly, however, members of Congress don’t have to pay the pre-existing condition tax on their own. They made sure of that. Following Obamacare’s passage, congressional leaders lobbied feverishly to preserve their subsidized health coverage, even demanding a meeting with the president of the United States to discuss the matter.
Senators and representatives do have to purchase their health insurance from the Obamacare exchanges. But the Office of Personnel Management (OPM) issued a rule allowing members of Congress and their staffs to receive an employer subsidy for that coverage. That makes Congress and their staff the only people who can receive an employer subsidy through the exchange.
Numerous analyses have found that the OPM rule violates the text of Obamacare itself. Sen. Ron Johnson (R-WI) even sued to overturn the rule, but a court dismissed the suit on the grounds that he lacked standing to bring the case.
Liberals’ Motto: ‘Obamacare for Thee—But Not for Me’
The sentiment of Ocasio-Cortez’ tweet echoes the actions of many liberal Obamacare supporters. Much as they claim to support Obamacare’s pre-existing condition “protections,” they have no interest in footing the bill for those “protections” themselves.
Take, for instance, the head of California’s exchange, Peter Lee. He makes a salary of $436,800 per year, yet he won’t buy the health insurance plans he sells. Why? Because he doesn’t want to pay Obamacare’s pre-existing condition tax unless someone (i.e., the state of California) pays him to do so via an employer subsidy.
Ocasio-Cortez’ proposed “solution”—fully taxpayer-paid health care—is in search of a problem. As socialists are wont to do, Ocasio-Cortez sees a problem caused by government—in this case, skyrocketing premiums due to the pre-existing condition tax—and thinks the answer lies in…more government.
As the old saying goes, when you’re in a hole, stop digging. If Ocasio-Cortez really wants to get serious, instead of complaining about the pre-existing condition tax, she should work to repeal it, and replace it with better alternatives.