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Another Congressional Controversy Over ObamaCare

By Emac's Bottom LineFOXBusiness

Members of Congress get to use pre-tax dollars when buying health insurance on the new state exchanges, while all other taxpayers must use after-tax dollars, government reports show.

Using pre-tax dollars lowers Congress’s costs even further, and adds to the growing controversy over the federal subsidies Congress won for their own health insurance under the new law.

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This is what happens when legislators whoop a bill through Congress without reading it first.

Initially, the new health-reform law forced Congress and their staffers to buy coverage in the new state exchanges, but without the new tax credits meant for the uninsured and without the generous 75% taxpayer-funded subsidy they already get for current coverage. The average salary House staffers get comes to around $58,000 a year, government data show. But no ordinary taxpayer at that income level would be allowed to get any tax credits on the new health exchanges.

Senators, including GOP Senator Chuck Grassley, wanted Congressmen enrolled in the state exchanges to eat their own cooking, and to feel the effects of the laws they pass. That push, though, ran counter to President Barack Obama’s statement that under the new law, individuals will be able to keep their health insurance. The new law does not mandate other taxpayers must join the exchanges.

As we reported to you last month, the Administration quietly reinstated Congress’s 75% federal subsidy for their plans in the new exchanges, which now will insulate Capitol Hill from the degree to which health reform drives up the cost of insurance for everyone else. The federal subsidies for Congress are worth an estimated $5,000 for an individual Congressional staffer or $10,000 for a family, GOP analysts estimate.

But also, Congress and staffers enrolled in the exchanges will get not just the 75% subsidy, but they also get to use pre-tax dollars to pay for their health-insurance premiums on the exchanges, according to the Office of Personnel Management.

Meanwhile, regular individuals and families who buy their own plans on the public exchanges cannot pay for their premiums with pre-tax dollars, nor will they be reimbursed tax-free from a cafeteria plan.

Separate from all that, the law says that small businesses with fewer than 100 employees can buy group health insurance through what’s called the “SHOP plan exchange,” which lets their workers pay their share of the SHOP plan premium with pre-tax dollars through the cafeteria plan.

Last April, the federal government announced that parts of the SHOP program would be delayed until 2015. SHOP was supposed to provide small employers with an insurance marketplace, or exchange, that offers multiple plan options starting in 2014. In most states employers will instead be limited to a single plan in 2014.

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