The impact of the cost disparity between an employer-sponsored group health insurance policy and an individual health insurance policy has never been more apparent than in the recent legislation battles regarding the government-sponsored health insurance of Congress and its staff. It all started, like most arguments these days, in the Patient Protection and Affordable Care Act (“PPACA”) negotiations. Senator Chuck Grassley (R-Iowa)1 proposed an amendment to Section 1312 of PPACA removing all members of Congress and their staffs from the Federal Employee Health Benefits (“FEHB”) program and forcing them to enter the newly-formed PPACA insurance exchanges.2As Grassley explained in 2009, “[t]he exchange…is designed to give participants the same kind of choices and options for health care coverage as federal employees. My interest in having members of Congress participate in the exchange is consistent with my long-held view that Congress should live under the same laws it passes for the rest of the country.”3 Surprisingly, the amendment passed, alongside speculation that an amendment “meant to embarrass the Democrats” by Republicans was accepted on principle by a “too clever-by-half” democratic base,4 and was incorporated into PPACA.
A few months later, the Office of Personnel Management (“OPM”) released formal guidance providing that the affected members of Congress and their staff would still qualify for an employer contribution to their insurance.5 The guidance acknowledged that the provision requiring members of Congress and their staff to join the exchanges included the phrase “notwithstanding any other provision of the law.”6 However, the employer contribution was not eliminated. OPM noted that the definition of “health benefit plans” is very broadly defined.7 Therefore, the current law, even as amended, required Congress to maintain the employer contribution for “all health benefits plans fitting within the definition set forth in [5 U.S.C.] 8901(6).”8 The federal government would be allowed to contribute the same amount to the plans on the exchanges that the government now spends on Congressional employees’ health benefits (it contributes about 75 percent of employee premiums).9
This interpretation was unsatisfactory to some members of Congress, who felt that the amendment had been stripped of its primary purpose. During a Senate floor debate on energy legislation a few months later, Republican Louisiana Senator David Vitter proposed another amendment that would remove the PPACA subsidies for Congress and its staff described by the OPM and re-establish the Grassley Amendment as he had originally interpreted it.10 The “Vitter Amendment” reads, in pertinent part, that “No Government contribution… shall be provided on behalf of an individual who is a Member of Congress, a congressional staff member, the President, the Vice President, or a political appointee for coverage”11
Through the course of various political maneuvering since the Vitter Amendment was proposed, the Amendment has been narrowed to include only members of Congress, the President, Vice President, and Cabinet Officers. Congressional staff will retain their government-sponsored health insurance from the FEHB program. As of November 20, 2013 it had not been voted upon in the Senate.
Potential effect of Original Vitter Amendment
It is interesting to consider the impact that the law as originally amended by Senator Vitter would have had on the Congressional staff and what that illuminates to the mainstream American population about the differences between an employer-sponsored health insurance policy and an individual health insurance policy that a person would obtain in the health insurance exchange.
The exchanges were intended for uninsured people who couldn't get health insurance through their employer or qualify for Medicaid. As the drastic cost effects of the Congressional staff participating in the exchanges without the benefits of employer sponsorship became apparent to members of Congress, the momentum to force the (generally not well-paid) staffers into the exchanges has dissipated. New York Republican Representative Peter King expressed the sentiments of many members of Congress and their staffers, saying the junior staff members were being “sacrificed” for political gambit.12 These comments were echoed by anonymous negative comments from staffers. With a recent survey from the Congressional Management Foundation suggesting that 63 percent of Congressional staffers were considering leaving their jobs because of low pay and long hours before the Amendments, it became risky for members of Congress to risk a mutiny.13
Those who have access to employer-sponsored health insurance meeting minimum coverage levels or have a certain level of income may still purchase insurance on the exchanges — but without a subsidy and using after-tax income.14 Using the Kaiser Family Foundation Subsidy Calculator for the U.S. average cost of insurance on the health insurance exchanges, Congressional Staff members in an average four person family (parents and dependent children) with income too high for the subsidy (>$95,000 combined) would pay approximately $800 per month for health insurance under the exchange. This number is drastically reduced by employer sponsorship whether the person received a government-sponsored health insurance policy or a health insurance policy from a private employer. Even if the private employer were merely paying the minimum to meet “affordable” insurance coverage mandated by PPACA, the cost would be subsidized by the employer and the person avoids taxation on the money.
Senator Grassley has recently noted that his intent all along was to create a system in which Congress should participate in the exchanges with their federal employer subsidy. “My goal, regardless of how the amendment was worded … was that we need to go into the exchange so that we would have to go through the same red tape as every other citizen.”15 In doing so, he also gave an instructive example of the cost disparities between those who obtain insurance through their employer and those who must pay out of their own pocket, and the vital importance of employer sponsorship to most Americans. As the health insurance exchanges open with varying levels of success, it is not often mentioned that employer-sponsored health insurance is still the most affordable and primary venue through which Americans receive healthcare. The rollercoaster of public opinion associated with these Amendments show that both Congress and its constituents are slowly gaining awareness of the full picture of the new state of health insurance in America.
Stephen Angelette is an associate in the Baton Rouge office of Breazeale, Sachse & Wilson, LLP practicing in the area of healthcare.
|1||Both Chuck Grassley and Thomas Coburn (R-Wyo) should receive some credit for this Amendment. In fall 2009, Coburn advocated for the same population to be included in a “Public Option” in the health insurance exchanges, in which there would exist a government-sponsored health insurance option. The Senate Health, Education, Labor and Pensions Committee adopted the Coburn Amendment. The Senate Finance Committee adopted the Grassley Amendment. Over the course of the next few months, as the Public Option was removed from consideration in the law, the Grassley Amendment became the primary vessel for this idea.|
|2||Congressional Record, U.S. Senate, Vol. 155, No. 186 (Dec. 11, 2009) p. S13043 http://www.gpo.gov/fdsys/pkg/CREC-2009-12-11/pdf/CREC-2009-12-11-pt1-PgS13039.pdf.|
|3||Brien Beutler, “Congress: Obamacare for Thee, But Not for Me,” Talking Points Memo (April 25, 2013) http://talkingpointsmemo.com/edblog/congress-obamacare-for-thee-but-not-for-me.|
|4||Ezra Klein, “No, Congress Isn’t Trying to Exempt itself from Obamacare”, The Washington Post Wonk Blog (April 25, 2013) http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/25/no-congress-isnt-trying-to-exempt-itself-from-obamacare/.|
|5||78 Fed. Reg. 60653 et seq. (Final Rule, Oct. 2, 2013). http://www.gpo.gov/fdsys/pkg/FR-2013-10-02/pdf/2013-23565.pdf.|
|6||78 Fed. Reg. 48337 (Proposed Rule, Aug. 8, 2013). http://www.gpo.gov/fdsys/pkg/FR-2013-08-08/pdf/2013-19222.pdf.|
|7||78 Fed. Reg. 60653.|
“Health Benefit Plan” means a group insurance policy or contract, medical or hospital service agreement, membership or subscription contract, or similar group arrangement provided by a carrier for the purpose of providing, paying, or reimbursing expenses for health services. 5 U.S.C. §8901(6).
|10||Texas Representative Michael McCaul submitted a companion bill in the House of Representatives.|
|12||Jonathan Weisman, “House to Add Measure Cutting Subsidy for Congress”, New York Times Politics Blog (Sept. 30, 2013). http://www.nytimes.com/news/fiscal-crisis/2013/09/30/republicans-to-propose-measure-cutting-congressional-health-subsidy/?_r=1.|
|13||Life in Congress: Aligning Work and Life in the U.S. House and Senate, A Joint Research Report by the Congressional Management Foundation and the Society for Human Resource Management (Sept. 9, 2013). http://www.congressfoundation.org/storage/documents/CMF_Pubs/life_in_congress_aligning_work_life.pdf .|
|14||Patient Protection and Affordable Care Act, Public Law 111–148 §1511 et seq.|
Meredith Shiner, “Grassley Frustrated with Fight Over His Amendment,” Roll Call (Sept. 26, 2013). http://blogs.rollcall.com/wgdb/grassley-frustrated-by-fight-over-his-health-care-amendment/.