Many Congressional Republicans Opposing Obamacare Have A Conflict of Interest

(A version of this Health Alert was published in The Hill on June 3, 2015.)

One day in June or July, Congress may well have the opportunity to re-open the Affordable Care Act. Congress will not be able to repeal it, but it may be able to induce President Obama to sign amendments that significantly reduce the harm Obamacare has caused.

The grounds would be a Supreme Court decision in King v. Burwell, a case which seeks to make the Obama Administration enforce the Affordable Care Act as written, instead of according to the President’s shifting political priorities. The instances in which the Administration has changed the law without Congressional amendment are numerous.

The one at question in King v. Burwell is the Administration’s paying tax credits to health insurers offering Obamacare plans in 34 states with federally facilitated exchanges. As a result of these tax credits, people who buy health insurance on exchanges pay premiums much lower than the otherwise would. If the plaintiffs prevail, these tax credits will stop and premiums will go up. Many people will decide to drop coverage. On the other hand, tax credits will continue to be paid in the 16 states (plus the District of Columbia) which have state-based exchanges.

This is not a politically tenable situation, and both Congress and the President have an incentive to fix it as quickly as possible. Congressional Republicans have promised an offer which will be acceptable to the President while mitigating the worst effects of Obamacare. However, they have not rallied around unified response.

One reason may be that many Representatives and Senators are benefitting from another illegal payment of public monies the Administration is using to prop up Obamacare. When the Affordable Care Act was being debated, one sticking point was that politicians were proposing to impose an unpopular health insurance “reform” on vulnerable citizens while leaving their own generous health benefits untouched. Members of Congress and their staff have long been covered by the same health plan that unionized federal public servants enjoy.

This obstacle was overcome by putting a clause in the Affordable Care Act that required Congressional politicians and their staff to pay for Obamacare health plans, instead of the ones public servants enjoy. Now, it may be that the politicians who voted for Obamacare did not understand what they voted for. After all, it is well known that they did not read it before they voted for it. Nevertheless, that is the black letter of the law.

Politicians could ignore this part of the law for a few years because Obamacare did not actually offer plans until 2014. However, as that deadline approached, they realized that they would have to buy health insurance in the exchanges without the subsidy they had previously enjoyed in the public servants’ health plan (which covered about 72 percent of costs, similar to employer-based health benefits).

So, politicians of both parties collaborated with the Administration to “fix” this, and the Office of Personnel Management (which is the federal government’s HR department) unilaterally decided in August 2013 to change the law and pay these subsidies to politicians’ and staffers’ exchange plans. The politicians and staff are then able to get health insurance through a Small Business Health Options Program (SHOP) exchange. Did you catch that? Congress is defined as a “small business” by its own administrative bureaucracy!

Actual small businesses have pretty much ignored Obamacare’s SHOP exchanges. A 2014 survey by the Pew Charitable Trusts reported that only two percent of small businesses had even investigated their states’ SHOP. SHOPs do nothing for small businesses struggling with providing increasingly costly health benefits, but they have proved a great escape hatch for politicians who want to avoid obeying the law as written.

Obviously, Congress cannot stand up to illegal Obamacare payments in federally facilitated exchanges as long as it benefits from its own illegal Obamacare payments. It is a straightforward conflict of interest. Some in Congress recognize this. Senator Ron Johnson (R-WI) tried to use the courts to overturn the administrative decision, but he did not get a hearing. Senator David Vitter (R-LA) is proposing an amendment to eliminate any possible ambiguity in the current law. Unfortunately, fellow Republicans oppose it.

Until Congressional Republicans reject the illegal Obamacare exemption with which the Administration has privileged them, it is difficult to see how they can commit to cleaning up other messes in the Affordable Care Act.

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