Members of Congress Still Don’t Understand How Obamacare Works

There was an awesome article in Politico yesterday on how certain members of Congress are trying to come up with a plan to exempt themselves and their aides from Obamacare. Specifically, they appear to be panicking about a provision that says they need to go to the exchanges to buy their insurance.

I’m going to ignore the political implications of these negotiations, which are horrific. If they, themselves, don’t want to be under Obamacare, then how can politicians ask anyone else to be? But what concerns me even more is the fact that the arguments they are using don’t make any sense. It’s as if they don’t understand the law at all. Take this, for example:

Sen. Richard Burr (R-N.C.) said if OPM decides that the federal government doesn’t pick up “the 75 percent that they have been, then put yourself in the position of a lot of entry-level staff people who make $25,000 a year, and all of a sudden, they have a $7,000 a year health care tab? That would be devastating.”

Wow. It sure would be – if that were possible. But it took all of 5 seconds for me to go to the Kaiser reform calculator and plug in some numbers. I made up a 30-year-old single staffer, said he makes $25,000, and was looking for a single person plan. I found out that in 2014, such a plan will likely cost $3440. But this person actually makes only 217% of the poverty line (nice, Congress!) so he would qualify for a significant subsidy. Therefore, the cost to him would be only $1714. That’s not even close to the apocryphal $7000. And that’s if the federal government refused to pay for a staffer’s insurance at all! That’s not what we’re discussing here.

But perhaps Sen. Burr is worried that this staffer might be supporting a whole family, and that once again the federal government will completely stiff him. Let’s rerun the numbers for a family plan. Now that $25,000 salary would qualify the staffer for Medicaid (again, nice Congress!), because for a family of four that salary is barely over the poverty line. While this staffer would likely not have qualified before the expansion, he would now, so his insurance is free. Of course, in some states (like Sen. Burr’s North Carolina), there will be no Medicaid expansion. But that’s not because of Obamacare, that’s because some states are unwilling to implement it fully.

But all of this is almost besides the point. There’s nothing in the law that prevents Congress from paying for the insurance, and they will. Congress covers most of the cost of insurance now, just like tons of employers, and they will continue to do so in the future. This is only a change in purchasing venue for the plans. I don’t know whether the legislators interviewed for this story don’t understand the law, or are purposely making up facts about it for political gain. I also don’t know which of those two options is worse.

[Originally posted at The Incidental Economist]