08/09/2013 05:43 pm ET

Will Obamacare Touch Off Mass Retirements On Capitol Hill? Here's Hoping Anyway!


Are a bunch of Capitol Hill critters about to announce retirements over Obamacare? That's the claim in this piece Friday in Newsmax, which states that "several members of Congress will announce their retirements and congressional staffers will be making retirement plans when Congress returns from summer recess next month." This is according to "observers" who are "seasoned." It's all a tad overheated, but it's not completely detached from reality. Just somewhat.

If we're keeping score on that, let's begin by throwing shade on the whole notion that a bunch of (presumably Republican) congresspersons are about to take their leave. The article accounts for precisely zero people in this situation. There is mention that Rep. Rodney Alexander (R-La.) has recently opted to retire and take a job in Louisiana Gov. Bobby Jindal's administration, and Rep. Jo Bonner (R-Ala.) has decided to leave and go to work for the University of Alabama. But as the article states, "neither Bonner nor Alexander cited Obamacare among reasons for quitting Congress."

Still it asserts: "No one would be surprised if other members of Congress follow the path of Bonner and Alexander by "cutting and running" before Jan. 1. Well, I for one would be surprised, because why wouldn't these people stay and remain connected to the special interests/K Street gravy train and get filthy, stinking rich forever?

But I digress. Let's examine the situation of Capitol Hill staffers, who are rumored to also be poised to quit en masse. Per Newsmax:

The Office of Personnel Management has approved a rule allowing current congressional healthcare subsidies to continue. Members of Congress and their personal office staffs, however, still must start buying their insurance on their individual states' Obamacare exchanges rather than choose from among the plans available to other federal employees.

"I'm going to have to get my health insurance through the Virginia exchange now," a veteran U.S. House staffer told Newsmax last week, "and I don't know the first thing about it."

Another Hill staffer who has worked for a House member for nearly 20 years -- and who has a pre-existing condition -- told Newsmax he planned to retire on Jan. 1 and seek another job.

"I just can't afford the change in [health benefits]," he said, pointing out there will be a bigger bite from his paycheck because of Obamacare.

Let's unwind this a bit. The reason we are in this situation stems from all the political nonsense that went on during the construction of the Affordable Care Act, specifically an amendment that was offered by Sen. Chuck Grassley (R-Iowa). Ezra Klein and Jonathan Chait offer up all you need to know about the gory details, but here's the short version.

Back during Affordable Care Act negotiations, Grassley put forth an amendment that was intended to be a silly sort of dare, that would force "all members of Congress and all of their staffs to enter the [Obamacare] exchanges." As Chait points out:

It was a message amendment -- that is, an amendment designed not to actually change the law in a way Grassley wanted, but to provide the grist for a talking point for opponents of the law. The talking point would be that those fat cats in Washington are forcing their laws down yer throat but won’t live by the same laws.

It was, to be precise, some silliness. But the Democrats, perhaps unaware of the law of unintended consequences, gleefully called Grassley's bluff and supported the amendment.

The problem, though, is that as it turns out, if everyone in Congress opts to pass a joke law because they want to play a bipartisan game of chicken, that law still goes into effect. And so the Obama administration has been forced to untangle all the damage from that time the Senate decided to indulge in a grand game of meta-theatrical satire.

Per Chait:

Obama’s solution to the dilemma was to administratively decide that those congressional employees would get their health care through the exchanges but that the federal government would keep up its same level of premium contributions. The law didn’t say the government could keep contributing to their health care, but it didn’t say it couldn’t either. (Law professor Nicholas Bagley explains why this move is legal.) Basically, Obama has patched up the ambiguously worded Grassley amendment and turned it into something performing the function it was supposed to serve. It puts Congress and its staff on the Obamacare health-insurance exchanges.

Now, what's happened most recently is that the Office of Personnel Management has offered a rule that's intended to undo this mess. Here is a summary:

Under the proposed rule, lawmakers and their staffers still would have to move from the FEHBP to the exchanges in January (Lawder, Reuters, 8/7). OPM said that while the government would continue to contribute to their premiums, the contributions likely would not exceed what they would have received under their current benefits plan (Hattem, "RegWatch," The Hill, 8/7). OPM reiterated that lawmakers and staffers would not qualify for the ACA subsidies available to other U.S. residents (Reuters, 8/7).

The proposed rule also clarifies several other issues related to the coverage requirement, including retiree coverage, definitions of residency and identifying staffers who would be required to move into the exchanges, The New York Times reports.

OPM said lawmakers are best equipped to determine which staffers work in their "official office" and should be moved into the exchanges. Further, lawmakers and staffers who receive coverage through an exchange would do so through the marketplace where the lawmaker or aide resides. For example, a caseworker in the home district office of a House member from Chicago could enroll in a health plan offered through the Illinois exchange, but a scheduler in the Washington office could sign up for a plan in Maryland or Virginia (Pear, New York Times, 8/7).

So basically, lawmakers will have to specify who remains covered by what, and where. And depending on those specifications, staffers may end up having to get insurance on their state's exchange. Those who do will be subsidized up to the level they had formerly been subsidized, but they will be ineligible for other subsidies that some state residents may claim (presumably because they do not qualify).

Now there is one definite nagging problem that these staffers face. If they end up on their state's exchange, there is no guarantee that their state exchange has any health care providers in the Washington area, where they work. The good news here is that their lawmakers are responsible for making this determination, so in theory there's nothing stopping them from ruling that their staff should remain associated with plans with providers in the D.C. area. The OPM has stated that it "will not review or overturn these determinations.”

As for the issue of having to pay more for insurance -- well, that's a murkier matter. Chait says that the people who find themselves in this situation are "not getting a big pay cut along with it." That doesn't mean that their new premium won't constitute a small pay cut, though! And what constitutes a big or a small pay cut is relative to the person holding the check. (The New York Times reports that older insurance recipients and smokers, in fact, would likely be paying higher premiums.)

Staffers should, by the way, recognize that one huge fringe benefit of their low-paying job is the opportunity to be an obsequious kiss-ass and parlay your connections to more money and more power. I'd say that if your boss dumps you on the state exchange, that's as clear a sign as any that you are failing in your suck-up duties, and should perhaps rethink a lot of things. Maybe tell your lawmaker what an honor it is work for him today, or volunteer to wash their car? It can't hurt!

Nevertheless, it would be very puzzling for people to quit Congress over this issue. Once you go from "Capitol Hill staffer with a residency in Arkansas" to being "unemployed person with a residency in Arkansas," it gets even harder to pay for health insurance. That's in addition to having an even harder time obtaining food, clothes, shelter, and other stuff. So quitting your job in a fit of partisan pique is really not that smart an idea! (Especially since becoming an unemployed person over the fact that you are going to end up on a state health care exchange only increases the likelihood that you will have to turn to those exchanges for your health care.)

Of course, the best thing that could be done here is to just go in and repeal this dumb amendment. The reason that won't happen is that currently you have one group of people on Capitol Hill who are happy to make targeted, sensible improvements in the health care law, and then you have the "Repeal or Bust" crowd that is afraid of anything that might make the law more effective. (See also: the whole kerfuffle over the employer mandate.) So we're stuck with the OPM's admittedly sub-optimal fix.

Basically, here's your bottom line.

This Newsmax piece is a bit overheated, but likely correct in noting that there's going to be an administrative burden on a whole lot of people as a result of this, and quite possibly some cuts in take-home pay for staffers. I think staffers should be paid more and have their health insurance comped, but I think that for most people. I don't think this is a good reason to quit your job, but people have to follow their bliss. Finally, this whole matter is dumb and confusing and unfortunate, but it's all basically Chuck Grassley's fault. So blame him.

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