Word is out now that despite a plethora of good options for a 64-year-old smoker living in Washington, D.C., House Speaker John Boehner will pay higher premiums next year than he did for his Federal Employees Health Benefit Program plan in 2013.
I actually anticipated this when I wrote my article last week about Boehner's options under Obamacare. But a number of conservatives seem to think the revelation discredits my claim that Obamacare's actually a pretty good deal for Boehner.
They're wrong. Obamacare remains a great deal for Boehner and his contemporaries, and while eliminating the law altogether might save Boehner a small amount of money if he reentered FEHBP, it would be a huge liability for a much greater number of 64-year-olds without Boehner's wealth and job security.
The point of my original piece isn't that the Affordable Care Act is a better deal than FEHBP (though it's actually quite comparable). It's that the law provides a number of affordable options to classes of people (elderly smokers like Boehner, for instance) who have been priced out of or paid stratospheric premiums in the old individual market.
So the objection is moot.
But let's take a closer look at the comparison Boehner's defenders want to make anyhow, because it's actually quite revealing. For the past two months, the law's critics have effused syrupy sympathy for young people whose premiums under the Affordable Care Act will help subsidize care for the sick and elderly. But on Monday they reversed their complaint, and are now upset on Boehner's behalf that young people won't be subsidizing him more than the law requires.
The core of Boehner's complaint -- or actually his supporters' complaints; Boehner himself is remaining silent on the issue -- is that his new plan costs about the same amount each month as his old plan, even though his new plan only covers himself, whereas his old plan covered his wife, Debbie, as well.
After accounting for the federal government's contribution to his premiums, Boehner's old plan cost him $433 a month, according to his office. Unlike several other GOP lawmakers, Boehner isn't declining or donating that contribution, and is instead applying it to his new plan in the D.C. health exchange. According to his spokesman, the list price of that plan is about $875 a month, with a $1,000 deductible, but his FEHBP contribution cuts the premium down to $449 a month. It's a $5,112 annual subsidy.
So Boehner will be paying an additional $16 a month for his health coverage, but his plan won't cover his wife, who will be enrolling in Medicare. Doesn't this prove Obamacare's a terrible program that should be repealed? After all, it'll force an old-timer like John Boehner to pay the same amount of money for half as much coverage.
To the contrary, these numbers actually prove the law is working very well in Washington, D.C. -- but that reality is obscured by the fact that Boehner has been benefiting from a hidden, expiring government entitlement for the past several years. (Which, come to think of it, probably explains why he, personally, isn't whining about his new plan.)
The Affordable Care Act prohibits insurers from charging older beneficiaries more than three times what they charge younger beneficiaries for equivalent coverage. This so-called 3:1 age band is the scourge conservatives decry when they complain that the law requires the young to subsidize the elderly. But in FEHBP, there's way, way more socialism happening. Three times as much to be exact. Everyone pays the same premiums for equivalent coverage, regardless of age. You could say that the age band is 1:1. Young Hill staffers have been hyper-subsidizing Boehner's health insurance for years. They will now subsidize it substantially less. If Obamacare prohibited age rating on the individual altogether, Boehner might actually be paying less now than he was before, but the young people conservatives claim to care about would encounter significantly higher premiums than they're seeing in the exchanges.
And that's if you assume the plan Boehner picked was the cheapest available to him for comparable coverage. Here, I'm at a disadvantage, because I can't browse prices on the small group market -- the so-called SHOP marketplace -- which is where Boehner and other members of Congress have to purchase their coverage if they want to keep their FEHBP contributions.
But I can poke around on the individual market. And there I found two $1,000 deductible plans -- one for $618.97 a month, another for $625.46 per month, for a 64-year-old. If Boehner's $5,112 annual FEHBP contribution were fully portable, these plans would cost him $192.97 and $199.46 a month, respectively. Less than half of what he was paying previously for spousal coverage. And that's including the 3:1 age band.
I have no reason to believe Boehner picked a costlier-than-necessary plan in order to foster political controversy. My hunch is these two individual market plans aren't available to him on SHOP. But they do prove that Obamacare is a pretty good deal in D.C., even relative to FEHBP and other group coverage. And it's probably a better deal still for young staffers transitioning from FEHBP on to the exchanges.
But the proper comparison in this instance isn't to the group market. The vast majority of people signing up for Obamacare won't be transitioning, like Boehner, from an employer plan into the exchanges. Most of them will be transitioning from the old individual market, or from from the ranks of the uninsured, into the exchanges. If you're a 64 year old man with a smoking addiction and no insurance in Washington, D.C., Obamacare will be a real blessing.
And of the subset of people who will be transitioning into the exchanges from group plans, many will be folks whose employers went belly up, or had to undertake a round of layoffs to stay in business. For better or worse, Congress isn't going out of business, and it's not going to lay off John Boehner. But other people don't enjoy that kind of job security. Prior to Obamacare the options available to a 64 year old Ohioan whose factory closed down included wildly expensive COBRA coverage and holding out for Medicare, hoping nothing bad happened in the intervening months.
His options will be much better now. And even if he can't find an equivalent plan for exactly the same price or less, I guarantee you he won't be whining about how the Obamacare age band isn't sufficiently favorable to the elderly. He'll be grateful for his options.
What Boehner and others want to do is leave him at the mercy of the old system.
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