The deal has been made; Congress and President Obama figured out a way to provide continued subsidies for healthcare premiums for congressional staff.  The Office of Personnel Management (OPM) just released the proposed regulation, which can be found here. Despite what many have noted is a lack of statutory authority to issue this regulation, it nonetheless allows members of Congress to continue providing a taxpayer subsidy of 75 percent of premium payments to employees, simply by switching the payments to the Obamacare health exchanges from the Federal Employees Health Benefits Program
(FEHPB).

There is nothing wrong with an employer providing healthcare coverage for its employees.  While paying 75 percent might seem excessive to the average taxpayer, that’s an argument for another day in regard to overall compensation and perks for members of Congress and/or staff.

However, the clean and statutorily appropriate way to handle the dilemma caused by the language of the Affordable Care Act (Obamacare) would have been to either pass legislation to formally exempt staff and keep them on the FEHBP, or include an amendment to Obamacare that would formally take care of what was written in the OPM regulation.  The current situation developed out of a change in language from an amendment that Sen. Charles Grassley (R-Iowa) offered during the Senate Finance Committee mark-up of the committee bill that required members of Congress and their staff to participate in the health plan.  The amendment was accepted because after all, Democrats in particular believed that it would be the greatest plan in history.

The Heritage Foundation lays out neatly how the healthcare legislation and in particular the Grassley amendment went through various changes to final passage.  Senator Grassley's original amendment put all Capitol Hill staff into Obamacare and also provided that their health insurance would continue to be subsidized by taxpayers, as it had been through the FEHBP. But when the Senate HELP Committee's healthcare bill and the Senate Finance Committee's healthcare bill were merged into one bill by Majority Leader Harry Reid (D-Nev.), the subsidy was removed.  Capitol Hill personal staff (but not committee or leadership staff) would be dropped from FEHBP and join Obamacare just like every other American without insurance.  Some staff might be entitled to taxpayer subsidies, but higher-paid staff, those that earn more than approximately $45,000 a year, and Members of Congress would not receive them.  (Obamacare provides subsidies to individuals with salaries up to 400 percent of the poverty level.)  While Congress had several opportunities to fix this problem legally during the healthcare debate, they did not do so.  Then members of Congress and their staff finally got to find out what was in the bill after it had become law and for the past two years have been sweating out what will happen to them at the end of 2013.  Would they continue to be subsidized, or would they have to pay thousands of dollars for healthcare coverage?

Since April, there have been numerous reports that members of Congress was trying to find a way to “exempt themselves” from Obamacare.  Capitol Hill personal staff, especially those in senior positions, were threatening to leave because of the huge premium cost increases they would experience.  Politico wrote several articles, which can be found here and here.  Then Politico reported that when the President visited Democratic member on Capitol Hill, in the past two weeks, he assured them that “he is now personally involved in resolving a heated dispute over how Obamacare treats Capitol Hill aides and lawmakers.”

And so he did.  OPM goes through all sorts of gyrations to defend its actions and proposes that if a health plan under Obamacare looks like one they normally contract with, well then gee whiz it is one.  Essentially, OPM has decided that it is appropriate to provide a taxpayer funded subsidy by essentially ignoring the law.  Ed Haislmaier of the Heritage Foundation spells out what OPM has done and puts it pretty succinctly by saying:  [T]he real issue is not the definition of a “health plan,” but rather the (lack of) legal authority for the federal government to pay for health plans through FEHBP that OPM has neither “contracted for” nor “approved.”

It remains to be seen who has standing to challenge this decision; by doing so, members and staff would risk losing the coverage they were seeking, and outside organizations that are not direct beneficiaries of the subsidy are likely to not have standing in court.

Employer mandates have been delayed for a year; the House has passed additional legislation calling for a similar delay for the individual mandate, and CAGW is signing a letter with many other taxpayer and free market groups calling for every provision of Obamacare to be delayed for a year.  Even labor unions, who lobbied strongly for the legislation while it was being debated have decided they do not like it either.  Recently, three major labor unions wrote Democrat leadership that Obamacare was causing great harm, declaring: “On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”

Will the Obama Administration to find a way to “fix” the situation for their friends in the labor unions too while millions of other Americans get stuck with Obamacare? As more and more Americans learn about Obamacare and how disrupting it is to healthcare coverage, the economy, and job creation will enough of them finally stand up and say “NO” and demand that Congress repeal the law?  Time will tell.