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OpEdNews Op Eds    H3'ed 4/26/13

Do Hill Dems Think High Health Premiums Are Okay -- Sometimes?

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Politico reports that Congressional leaders from both parties are trying to find a way to exempt themselves and their staff members from using the "Obamacare" health exchanges, as mandated in the health reform law. The Politico story says that Hill leaders are afraid that their lower-paid staffers would leave their Congressional jobs in large numbers if they were hit with significant out-of-pocket Obamacare costs.

The story also says that representatives and senators are concerned that "older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty," and were "also concerned about the hit to their own wallets."

If the story is true -- and so far there have been no denials from Democrats -- then this highlights a potential landmine for the Democrats. It suggests that Obamacare's requirement for premium costs will be too onerous for lower-income and middle-class working Americans to bear. Those out-of-pocket costs rise to 9.5 percent, after subsidies, which end once income exceeds four times the Federal poverty level, which comes to roughly $43,000. Payment provisions below that level will also have a significant impact on household budgets.

(UPDATE: Ezra Klein has a clarification from Dems which says they're objecting because, for technical reasons, staffers would have to pay 100 percent of their premium share. Unfortunately that doesn't contradict the argument that out-of-pocket premium requirements are burdensome, and may in fact reinforce it.)

The "individual mandate" provision takes effect next year, and it appears to be the source of Congressional fear. It now appears as if Democratic leaders in the House and Senate are afraid that these provisions will be so onerous that they'll lose many of their top staffers.

But weren't we told that Obamacare provides "universal coverage," and that it will be an enormously popular bill? Didn't a series of Democratic luminaries, including Hillary Clinton, tell us that the individual mandate was a wonderful idea? Weren't we told that Massachusetts residents love their version of Obamacare (aka "Romneycare")? Weren't we told that similar plans worked very well in nations like Switzerland? Didn't Nate Silver tell progressives that they would be "batsh*t crazy" not to enthusiastically support a bill that could drain a household income by nearly 10 percent -- for mediocre private-sector health insurance coverage?

Now, it seems, the second thoughts have begun. But, to be fair, who could have seen this coming?


We were among the first (possibly the first) to argue against John Edwards' and Hillary Clinton's individual-mandate proposals in the 2008 primaries. (In 2007 we called them "a bug, not a feature," in health reform.) We pointed out that Massachusetts residents who were personally affected by the law liked it far less than other people did, with only a slim majority supporting it even in that liberal state. (Their lack of enthusiasm appears to be shared by Hill staffers.)

It's also worth noting that a significant number of Massachusetts residents who disapproved of the law two years later felt that way because it didn't go far enough in reforming the healthcare system.

We explained that Switzerland's lower-cost, nonprofit-driven health system can't be compared to our system of overpriced health insurance, where most people who become bankrupt for medical reasons did so despite actually having insurance coverage. And we advised progressives that, pace Silver, they would be "batsh*t crazy" to embrace a health plan that forced people to buy a lousy private-sector product -- or pay higher taxes if they couldn't afford it.

It looks like the bats have come home to roost.

Rep. Henry Waxman may have been correct when he told Politico that Congressional fears were unfounded, and that Hill politicians and staffers would be exempted from the onerous out-of-pocket provisions of Obamacare. But the point has still been made, however inadvertently, by Democrats in Washington: These mandates are too much for working Americans to bear.

They were, however, a great boon to the health insurance industry. That's why we looked to see how well health insurance stocks did the day after Obamacare's passage. They did quite well, thank you very much. It was a red-letter day for health insurance executives, if not for working Americans.

There are plausible economic arguments for requiring all Americans to purchase health insurance (although they're not as conclusive as their proponents usually claim). But they certainly don't outweigh the dire economic effect healthcare costs have on most Americans. (See "A Healthcare Bailout for the Middle Class.")

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Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

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