[Updated] Obamacare and Congressional Health Plans

Attack Ads Hit Republicans for Taxpayer-Funded Insurance

Traditionally, U.S. Representatives and Senators have been provided health insurance through the Federal Employees Health Benefits Program, which is open to all federal workers.  However, this perk is about to end thanks to a provision in Obamacare that requires legislators to be insured through the state health insurance exchanges set up under that law.  This requirement was inserted as an amendment to Obamacare by a Republican Senator, Charles Grassley (Iowa), to force legislators to "live under the same laws [they] pass[] for the rest of the country."  If Obamacare is overturned, as many Republicans favor, Congressional health insurance would revert back to the federally funded system covering all federal employees.

Now, according to the New York Times, Democratic challengers in some Congressional races are accusing the Republican incumbents of hypocritically voting themselves "taxpayer-funded healthcare for life."  The charge stems from criticism of Republican efforts to repeal Obamacare, which would also repeal Senator Grassley's requirement that legislators be insured through the state-based exchanges.

Whether or not the Republicans are acting hypocritically in this situation, the article's discussion of the possible effects of Obamacare on Congressional health insurance helps to illuminate a major problem that haunts the implementation of Obamacare:  uncertainty over what the law actually does.  Here are two possibilities:

1. Legislators lose their federal healthcare benefits and instead must purchase insurance from an exchange with their own money, or
2. Legislators retain federally funded health insurance, but the plan changes from the Federal Employees Health Benefits Program to some private insurance purchased (by the taxpayers) in a state-based exchange.

As to the attack ads arguing that the Republicans are hypocrites, no one can tell yet whether the charges are accurate since the law has yet to be implemented.  Thus, Democrats seem to be premature in calling out Republicans as hypocrites.

As to the wider matter of uncertainty over the effects of Obamacare, this article illustrates the problems that many private companies (large and small*) will be facing in the near future.  Not only is there uncertainty over whether Obamacare will be repealed (in the event of a Romney win), there is also uncertainty over the legal requirements that will come into force in regards to employer-sponsored health plans even if Obamacare remains.

[UPDATE]:  Commenter dpmckay asks what the exact effect of Obamacare will be on small businesses.    According to The Wall Street Journal, the smallest businesses (2-49 employees) will have no requirements and instead will qualify for subsidies if they offer their employees health insurance.  Starting in 2014, businesses with over 50 employees must either provide a health insurance plan to their "full-time" employees (30 hours or more) or pay a penalty (it is unclear whether the penalty is $750 or $2,000).  There is still uncertainty over the exact rules for determining just who counts as a "full-time" employee, as shown by this U.S. Department of Labor FAQ for employers (e.g. regulations are pending).

There are few businesses who employ 50 or more employees and do not offer insurance:  0.2 percent of all firms according to the Healthcare.gov website.  Healthcare.gov also mentions that these firms may be able to find cheaper plans on the state insurance exchanges due to Obamacare, which may offset some of the costs of offering insurance.

*A Personal Note:  Just a few days ago, I was talking with one of the managers of the small company I work for about health insurance.  He made it clear that the company could not make any promises at this time because they still had no idea what would be required under Obamacare.