ESSAY: The Congressional ACA Deal: Not An Exemption, Just More of the Same

Essay: The Congressional ACA Deal: Not An Exemption, Just More of the Same

-Christopher Carroll

Congress isn’t giving itself an ObamaCare exemption, but the deal recently reached with the White House isn’t doing the Affordable Care Act any favors.

Congress and their staffers, after a small measure of hysteria, do not need to worry that they will lose the health insurance coverage provided them by the federal government: the Obama administration has seen to that. With the deal came a collective sigh of relief from congressional offices across the country. It also came with a sense of resentment from many voters.

The issue arose when it was realized that Democrats had agreed to a provision written into the Affordable Care Act by Senator Charles Grassley (R.-Iowa) requiring Congress and their staffers to be covered by health insurance offered through the ACA exchanges. What at the time was perceived to be rather minor legislation has now seemingly overly burdensome for the Congressmen who wrote the law.

 

The difference between the old and new systems is by no means inconsequential. Right now, prior to implementation of the ACA on January 1st, members of Congress and their aides are covered through the Federal Employee Benefits Program, a program that covers 75% of premiums. Grassley’s statute, however, means that about 11,000 Congressmen, aides and staff would lose that coverage. Additionally, Congressmen and some staffers wouldn’t be able to qualify for other benefits provided by the ACA. “The Members – annual salary: $174,000 – and their better-paid aides also wouldn’t qualify for ObamaCare subsidies,” explains the Wall Street Journal. “That means they could be exposed to thousands of dollars a year in out of pocket expenses.”

The deal has expectedly been met with scathing remarks and scorn. Republicans on the Hill, including Sen. David Vitter (R.-La.), have not wasted time to make political hay, calling Obamacare “a train-wreck, even for Congress.” Many voters are angry as well, interpreting the deal as more back room dealings by untrustworthy Congressmen placing the burdens of unwanted laws on the people while exempting themselves.

Others, meanwhile, do not see the deal as an exception for Congress at all. Nancy Pelosi (D.-Ca.) believes that the deal resolves legislation that was meant simply to embarrass Democrats, “and the collateral damage was to staff.” Ezra Klein, the popular writer at Wonkblog, has pointed out that the deal is not an exemption at all and calling it one is misguided. Instead, the deal is meant to fix a problem created by the Grassley amendment.

Français : (Photo credit: Wikipedia)

The issue at hand isn’t about the cost the deal may or may not force on individuals. Instead, it is an issue of law, logistics and timing. As explained by Mr. Klein, “Grassley’s amendment means that the largest employer in the country is required to put some of its employees — the ones working for Congress — on the exchanges. But the exchanges don’t have any procedures for handling premium contributions for large employers” until 2017. In other words, because large employers aren’t allowed on the health exchanges, Congressional staffers and aides will not be afforded the same opportunities that most Americans will be offered under the Affordable Care Act. They will, in effect, be penalized for working for the government.

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Americans angry at Congress are misdirecting their frustration; the public’s enmity should instead be directed towards Obama administration and the administration that should be embarrassed.

The President’s crowning achievement, the Affordable Care Act, was conceived with exemplary intentions. Free healthcare for all has long been an idea dearly held by many liberal lions throughout the decades and this bill was meant to get America closer to that ideal. However, the bill is crumbling around itself.

Earlier this year, the administration postponed the employer mandate of the ACA, weakening the law so as to buy time for businesses to implement the new requirements. Now, Americans hear of more band-aid fixes and backroom deals, necessary to rectify further failures to anticipate the needs of government workers.

The deal itself, is good. It is not an attempt by Congressmen to get out of a poorly constructed bill. It is simply an attempt to treat congressional aides fairly, giving them the opportunity to receive employer benefit options, similar to ones that are going to be offered to people not affiliated with Congress. However, Congressmen and aides should bare in mind that this fight has come at a political cost for Obama and the ACA in general. On the surface, the deal appears to be an attempt by Congress to avert being subjected to laws already imposed upon the people. The political ramifications of those feelings are dangerous during good economic times, even more so when felt during times of economic instability and high unemployment.  Congressmen would be smart to take time to explain this to their constituencies. The ACA is already an immensely complicated bill. Most people are misinformed about what it does and how it could help them and this deal is more bad press for a bill that has received precious little.

 

It is a shame that a bill that was viewed as progress towards universal healthcare, a passion for generations of Democrats from FDR to Teddy Kennedy, has have been so badly botched. Could ObamaCare do more harm than good on the road towards universal healthcare in America? With each passing failure, the answer becomes a more emphatic, yes.

Postponement of “Employer Mandate” Highlights Obamacare Troubles

Postponement of “Employer Mandate” Highlights Obamacare Troubles

-Christopher Carroll

Much to the surprise of many, the Obama administration announced on Tuesday that it was postponing until 2015 the Employer and Insurer Reporting Requirements portion of the Affordable Care Act, fueling skeptics of the ACA and striking fear in the Act’s  devotees. This postponement is bad news for Obamacare, contributing further example of how the President has lost his 2013 agenda and pointing underlying vulnerabilities of the ACA.

Reception of the news has been mixed. Some believe that the fears are much ado about nothing, while others are convinced that a rock has begun to roll down a slippery slope.

Assistant Secretary for Tax Policy Mark J. Mazur, explained that concerns that the complexity of the ACA and the approaching deadline of the mandate where too onerous for businesses, convinced the administration to postpone the requirement so as to “effectively” implement it down the road.

The postponement, explained Mazur, is meant to simplify the reporting system over the next year and to “provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

The “employer mandate” is meant to be an additional incentive for businesses exceeding 50 full-time employees to provide healthcare coverage to their employees rather than foist their employees onto Obamacare’s subsidized insurance exchanges. However, while the mandate is certainly an important tool to prevent insurance holes in the ACA, the mandate is not an exceedingly important portion of the act overall due to the additional labor market incentives businesses will find themselves subject to.

Mr. Mazur and others, Brian Beutler of Talking Points Memo among them, believe that the temporary suspension of the “business mandate” will not prove to be overly impactful upon the short-term prospects of the ACA. Their belief is that because most businesses large enough to employ 50 people already provide health care and, crucially, that because the ACA establishes labor market incentives anyway, that the “employer mandate” won’t be overly missed between October 2013 and 2015 anyway.

Meanwhile, other writers worry that removal of the business mandate will have two negative effects: opening a coverage hole big enough for businesses of all types to slip through, and starting the ACA, an already immensely complicated bill, off on the wrong foot.

In the end, both schools of thought are right. Postponement of the mandate will not provide immediate problems for the ACA. Businesses will find that when in order to attract top talent from a pool of people required to obtain insurance somewhere, it is in their interests to provide insurance themselves. However, those who fear that the postponement will leave a gaping whole in the ACA are not irrational, for any business not worried about the talent of their labor force could decide for the next year not to provide anything, thereby forcing individuals to either obtain insurance on their own or face paying a tax themselves.

The fact of the matter is that the postponement is bad news for the Affordable Care Act. It not only points to a rocky road ahead as unforeseen potholes and ditches in the bill are patched up, but the mandate itself is hard to implement and could have a negative impact on the economy in the long run. Already today, buried within otherwise good employment rate news, uncertainty about the effects of the Affordable Care Act on businesses is making the market uneasy. More tangibly, while incentivizing large firms to insure their employees, it will become a disincentive for smaller business to grow beyond 49 employees, presenting a large wall that must either be avoided or scaled.

Obama calling lawmakers about healthcare bill (Photo credit: Wikipedia)

This last point is dangerous for the ACA and must be addressed, both for the sake of Obamacare and for the sake of Obama’s legacy. The Affordable Care Act could become, or lead to, a transformative rebalancing of American society, where the health of our friends, neighbors and fellow citizens is not a matter of who can afford care, but of how we are cared for. But that transformation will be sullied, if it comes at the expense of the economic strength of our communities and the economic wellbeing of our citizenry.