Congress and the Affordable Care Act: File under Revealed Preferences

John Bresnahan and Jake Sherman (Politico) report (unsurprisingly) that those who brought us the Affordable Care Act are scurrying to create exemptions for Capitol Hill. The big concern: the costs of insurance on the exchanges will lead to the rapid exodus of legislative aides—a policy-induced brain drain.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides.

They continue:

The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer — in this case, the federal government. If not, aides and lawmakers in both parties fear that staffers — especially low-paid junior aides — could be hit with thousands of dollars in new health care costs, prompting them to seek jobs elsewhere. Older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty. Plus, lawmakers — especially those with long careers in public service and smaller bank accounts — are also concerned about the hit to their own wallets.

Nancy Pelosi famously assured her audience “we have to pass the bill so that you can find out what is in it.” Now that lawmakers have found out what is in it, it appears they are not too pleased.  Or should we interpret their actions differently?

4 thoughts on “Congress and the Affordable Care Act: File under Revealed Preferences

  1. Marc, you’re being selective in what you’re quoting.

    Man up.

    Senator Grassley offered a poorly written amendment that would have put Congressional staff onto the exchange, but would have allowed Congress to still pay a portion of their premium.

    But Grassley’s amendment was so poorly written it may prevent Congress for paying any portion of the premium, leaving 100% to employees.

    Go look at Jason’s recent thread about how to ensure a more knowledgeable and professional staff for Congress. Then reconsider gloating.

    1. You are correct. The Grassley measure was poorly written (it was, after all, written in the belief that Congress would reject it). Now there is ambiguity over whether the Feds can pick up the tab for 75 percent of the costs. If the workers have to pick up a larger share of their health care costs, they may exit. Congress would like to fix this for Capitol Hill.

      Of course, there is great uncertainty over future costs and the exchanges nation-wide. The Grassley amendment was not the only part of the ACA that was poorly written and will have unintended consequences.

      Let me share a quick anecdote. I have a good friend who runs a small non-profit. Historically, the non-profit has covered the insurance costs of its employees. Having received some early projections on rate increases for 2014, she has concluded that there is no other option but to put her employees on to the exchange. She will continue to give them the cash equivalent of what the non-profit was paying for insurance, but the difference between that amount and what insurance will cost on the exchange has led her to fear that many of her employees will have no other option but to quit to find more lucrative jobs in the for-profit sector.

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