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Did Obama exempt 1,200 groups, including Congress, from Obamacare?

People gather for information during an Affordable Care Act outreach event in Los Angeles, California  (REUTERS/Jonathan Alcorn)

 “The president has exempted over 1,200 groups, including members of Congress, from the health care law.”

— Rep. Steve Scalise (R-La.), in an interview on CNN, Oct. 15, 2013

During an appearance on CNN, Rep. Scalise, chairman of the House Republican Study Committee, combined two common assertions made by opponents of Obamacare, a.k.a. the Affordable Care Act.

How valid are these claims? Let’s take a look.

The Facts

The first part of Scalise’s statement refers to one-year waivers that the Department of Health and Human Services granted to 1,231 companies and other organizations regarding the law’s restrictions of annual benefit caps.

Yep, you read that correctly. He is referring to a one-year waiver regarding one, relatively small aspect of the law.

The waivers were granted to companies (such as McDonald’s or other fast food chains) and other organizations that provided inexpensive bare-bones health plans known as “mini-meds,” in what the administration called “a bridge” to 2014, when the law would be fully implemented. That’s because the law says that annual coverage limits can’t be lower than $750,000 in 2013 — and there are no annual dollar limits starting in 2014. So without those waivers, employees in those plans might have been left in the lurch until the law fully went into effect.

All told, the waivers cover a little under 4 million people, or 3 percent of population in employer-provided health plans. But Scalise is wrong to suggest these waivers were permanent — or went to “groups.” The waivers to this one part of the law expire in just a few months.

“Every waiver given by President Obama to specific groups or companies constitutes an exemption from the ACA – the employer mandate and the benefit caps to 1,231 groups are two such exemptions,” said Stephen Bell, communications director for the committee.

As for Congress being exempted, this is also incorrect.

As a result of an amendment offered by Sen. Charles E. Grassley (R-Iowa), the Affordable Care Act includes a provision that would require members of Congress (and their personal staffs) to get their insurance on the Obamacare exchanges. The Heritage Foundation has released a very interesting paper that details the legislative history of this provision, and how efforts to adjust it (including by Grassley) slipped away before final passage.

Thus there was an unexpected wrinkle: the exchanges are intended for people who currently do not get employer-provided insurance, whereas lawmakers and their staffs previously had about 70 percent of their insurance premiums underwritten by the federal government through the Federal Employees Health Benefits Program. For lawmakers and their staffs, the loss of employer contributions would have amounted to an unintended pay cut of between $5,000 to $10,000.

In ordinary times, technical fixes to complex bills are routinely passed, as there are often drafting errors. The Heritage paper makes clear that this problem was never intended. But as a consequence of the Democrats’ decision to pass such sweeping legislation with no Republican votes, it is all but impossible for such legislation to win support in the House. Politically, lawmakers also did not want to solve their particular problem while leaving other technical fixes untouched.

Under pressure from Congress, the Office of Personnel Management proposed a rule in August, which was finalized in September, saying the federal government could still contribute to health-care premiums.

The final rule would keep the subsidy in place only for members of Congress and affected staff who enroll in a Small Business Health Options Program (SHOP) plan available in the District of Columbia. Such plans most commonly will be aimed at employees of businesses with fewer than 50 workers, but perhaps the theory is that each lawmaker and his or her staff constitute a small business. In any case, lawmakers and their staffs are not eligible for the tax credits that other Americans using the exchanges might qualify for.

The Fact Checker takes no position on whether making up the lost contribution is a good or bad thing — some Republicans have proposed to eliminate it in some of the proposals circulating to end the government shutdown — but it’s a stretch to claim that this is some sort of exemption from the law. Members of Congress and their staffs are certainly enrolled in the health care plan, and it’s a rather technical question about whether the administration overstepped its authority or whether it was merely taking action that lawmakers (including reportedly House Speaker John A. Boehner) privately urged because the difficult politics of the health-care law.

Robert Moffit, a co-writer of the Heritage paper, says that the OPM rule amounts to “special treatment” not available to other Americans. “Perhaps Scalise was linguistically imprecise in using the word ‘exemption’ to describe the state of Congress and staff, but materially he was not in any way incorrect in saying that members and staff are legally exempted from the terms and conditions that apply to every other American who must buy coverage in the exchange,” he said.

(For the viewpoint of congressional staffers concerning this issue, both Republican and Democrat, check out this interesting New Yorker article.)

Bell argued that “under the OPM rule, approximately 16,000 congressional employees will obtain their health insurance through the SHOP exchanges, 320 times more than the amount supposedly allowed under the law.” He said this “is clearly an exemption from the ACA for Congress by the Obama Administration.” He cited a dictionary definition of exemption: “freedom from being required to do something that others are required to do.”

But as we noted, the exchanges were not intended for people already with employer-provided insurance. So it’s already a rather unusual situation. Costs have been imposed on lawmakers and their staffs that did not previously exist, and OPM’s rule appears intended to solve that problem — instead of “exempting” them from the health care law.

The Pinocchio Test

Scalise’s use of the word “exempted” is much too expansive. He gives the impression that vast segments of politically connected “groups” have been excused from the health care law when in fact he is mostly  referring to a one-year waiver that was intended to make the transition to the new system easier for people with bare-bones insurance.

The issue concerning Congress is more complex, but the bottom line is that the administration’s action was intended to reduce an unintended burden, not carve out an exception. Scalise would have been on stronger ground if he had claimed that Congress got special treatment, rather than suggesting that lawmakers and their staffs were not covered by the health care law. It’s important to be precise when making allegations, and thus he earns Three Pinocchios.

Three Pinocchios

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