When Obamacare (PPACA) was passed in 2010, many congressional staffers were probably aghast that their bosses were dragging them along into the ACA Exchange abyss where only desperate Americans must resort for health insurance. Health insurance in this newly created ACA Exchange could only be worse than the Federal Employee Health Benefit (FEHB) program. Right? Wrong. A surprising benefit of being thrown into the ACA Exchange is that congressional staffer health insurance is cheaper. Let’s take a closer look at what congressional staffers gave up leaving the Federal Employee Health Benefit (FEHB) program and why congressional staffer health insurance is cheaper.
FEHB Benefits Transferred to ACA Exchange
In surveys asking government employees about FEHB program satisfaction, they, not surprisingly, always report being extremely satisfied with it. What’s not to like, after all—the government (the employer) subsidizes the insurance premium at 72-75%, the specific benefits provided in the Gold plans are some of the best among the employer-sponsored programs in the country, and it only takes 5 years of participation to get retiree health insurance. The taxpayer subsidies include the 72-75% government contribution to the health insurance premium and the Employer-Sponsored Insurance (ESI) exclusion that allows for pre-tax payment of the employees’ share of the premium cost. These taxpayer subsidies add up to thousands of extra dollars in the pockets of federal employees. The government’s open ended premium subsidy cushions (i.e., by paying 72-75% of the premium rather than giving a fixed amount) federal employees from the true impact of high health care inflation. The FEHB program provided many health plans to choose from with about 10 choices of nationwide fee-for-service plans (e.g., PPOs) and many more state-specific non-fee-for-service plans (e.g., HMOs and HDHPs). There are 11 nationwide fee-for-service plans and many state specific non-fee-for-service plans everywhere across the country (e.g., 10 in the D.C. area). Even with this large selection, the largest percentage of federal employees choose Blue Cross Blue Shield PPO plans for their coverage.
Congressional Staffer Health Insurance in the DC Health Link SHOP
As I described in my last blog post, thanks to the influence of their bosses (our elected representatives and senators), congressional staffers are allowed to buy their health insurance on the DC Health Link SHOP marketplace (rather than on the ACA marketplace for individuals). In this small employer (less than 50 employee) SHOP marketplace, congressional staffers continue to enjoy all the FEHB taxpayer-subsidized health benefits described above including the fact that their DC Health Link SHOP insurance plans count toward eligibility for FEHB retiree benefits ((i.e., continuous enrollment in a health plan offered under FEHB (or through the DC Health Link SHOP) for the five years of service). Congressional staffers are also still eligible for the Federal Employees Dental and Vision Programs (FEDVIP)
The plans being offered to congressional staffers on the DC Health Link SHOP marketplace are essentially the same as those offered to federal employees in the FEHB program (Gold plans). While the total number of insurance companies participating is lower than in the FEHB, there are still plenty of popular choices from which to pick. As in the FEHB, the popular nationwide PPO offerings are still available from Blue Cross Blue Shield. In the FEHB program, the “Blue Cross and Blue Shield Association and participating Blue Cross and Blue Shield Plans” together offer the nationwide PPO plans while in the DC Health Link SHOP marketplace it is CareFirst BlueCross BlueShield that provides 5 nationwide PPO plans (in 2017). In the FEHB programs, CareFirst BlueCross BlueShield only offers PPO plans that service Maryland, the Northern Virginia area and Washington, DC. While Kaiser Permanente’s HMO offerings are state-specific in the FEHB program, they are nationwide in the DC Health Link SHOP marketplace. A congressional staffer from parts of the country where Kaiser Permanente operates (DC, MD, VA, CA, CO, GA, OR, WA, and HI) can take advantage of the nationwide coverage found only in the DC Health Link SHOP marketplace and not in the FEHB plan.
To understand how the congressional staffer health insurance is cheaper in the DC Health Link SHOP marketplace, one needs to look at how the insurance risk is priced for the various plans in the FEHB program and the DC Health Link Shop marketplace.
Congressional Staffer Health Insurance is Cheaper
So how can the DC Health Link SHOP health insurance plans get any better for congressional staffers? Congressional staffers have an advantage over their bosses when it comes to buying on the Obamacare ACA Exchanges; namely, they are on average much younger. The average age of a DC-based House office staffers is 31 and the average age of Senate staff is about 34 (with nearly two-thirds of Senate staff under the age of 35). In contrast, the the average age of a Representative is 57 and the average of a Senator is 61.
In the DC Health Link SHOP marketplace, the insurance companies price their premiums based on the enrollee’s age (and family members’ ages for family coverage). Young people pay less than old people—by as much as three times. Therefore, congressional staffers will be able to pay lower premium prices for the same insurance coverage sold simply because they are buying it in the DC Health Link SHOP marketplace rather than in the FEHB program! In the FEHB program, all federal employees pay the same premium for a given plan regardless of their age. In other words, the young and healthy subsidize the old and the sick in the FEHB program but not in the DC Health Link SHOP marketplace.
In the table shown below, we can get an idea of how much lower congressional staffer health insurance premiums are in the DC Health Link SHOP plans. The data is from 2015 because I couldn’t find newer data for the DC Health Link SHOP plans online. The monthly premium prices shown are the full premium prices charged by the insurance companies before the government pays its 72-75% share.
Because their average age is very low, congressional staffer health insurance is cheaper in the DC Health Link SHOP marketplace than in the FEHB program. Unlike their young congressional staffers, the congressional staffers’ bosses (representatives and senators) are paying much for their health insurance in the DC Health Link SHOP marketplace because the younger federal workers are no longer subsidizing them. If these representatives and senators had been required to buy on the individual ACA Exchange, they would have had to pay the full premium price (no subsidies for those making over 400% FPL). Perhaps this will give our lawmakers a very small idea of what it means to be older and buying health insurance in the ACA Exchange.
In addition, most congressional staffers leave their jobs way before they would feel the impact of the higher age premiums on the DC Health Link SHOP marketplace.
Congressional staffers who had to follow their bosses to the DC Health Link SHOP marketplace rejoice! Because you are young, congressional staffer health insurance is cheaper in the DC Health Link SHOP marketplace than in the FEHB program you left. You don’t have to subsidize the health insurance premiums for older federal workers in the FEHB program but you will still get all of its benefits. Enjoy your reduced health insurance premiums and put in at least 5 years in the DC Health Link insurance plans (to earn the right to get FEHB retiree benefits) before you find a more lucrative job with one of the many lobbyists in Washington. Good Luck!