Congress wins relief on Obamacare health plan subsidies

President Barack Obama speaks about home ownership in Phoenix as Congress won relief on Obamacare health plan subsidies.

Lawmakers will continue to receive a federal contribution toward the health insurance they must buy through President Barack Obama's healthcare law.

WASHINGTON — Congress has partially wriggled free from the "Obamacare" health reforms that it passed and subjected itself to three years ago.

In a ruling issued on Wednesday, U.S. lawmakers and their staffs will continue to receive a federal contribution toward the health insurance that they must purchase through soon-to-open exchanges created by President Barack Obama's signature healthcare law.

Related: 39 percent of Americans want Obamacare repealed, according to poll

The decision by the Office of Personnel Management, with Obama's blessing, will prevent the largely unintended loss of healthcare benefits for 535 members of the Senate and House of Representatives and thousands of Capitol Hill staff.

When Congress passed the health reform law known as "Obamacare" in 2010, an amendment required that lawmakers and their staff members purchase health insurance through the online exchanges that the law created. They would lose generous coverage under the Federal Employees Health Benefits Program.

The amendment's author, Republican Senator Charles Grassley, argued that if Obamacare plans were good enough for the American public, they were good enough for Congress. Democrats, eager to pass the reforms, went along with it.

But it soon became apparent the provision contained no language that allowed federal contributions toward their health plans that cover about 75 percent of the premium costs.

This caused fears that staff would suddenly face sharply higher healthcare costs and leave federal service, causing a "brain drain" on Capitol Hill.

But Wednesday's ruling from the OPM, the federal government's human resources agency, means that Congress will not have to fully live with the reform language that it created — just as Republicans are trying frantically to delay or defund the program.

The OPM said the federal contributions will be allowed to continue for plans purchased on the new online health insurance exchanges, ensuring that Capitol Hill employees will effectively get the same health contributions as millions of other federal employees who are not being thrown onto the exchanges.

STILL MUST PURCHASE PLANS

"These proposed regulations implement the administrative aspects of switching members of Congress and congressional staff to their new insurance plans — the same plans available to millions of Americans through the new exchanges," Jon Foley, OPM Director of Planning and Policy, said in a statement.

Lawmakers and staff still must purchase plans on the exchanges for coverage that starts in January, OPM said, and they will not be eligible for tax credits to offset premium payments. These credits are the main federal subsidy mechanism for all other health plans purchased through Obamacare exchanges due to open in October. These tax subsidies fall off quickly as income rises.

Tim Jost, a healthcare law expert at Washington and Lee University in Lexington, Virginia, said it was probably never Congress' intention to take away federal benefit contributions from Capitol Hill employees, just to push them into them into the exchanges.

There is nothing in the health law that prohibits private companies from contributing to employee health insurance premiums for plans purchased on the health exchanges, Jost said.

"This clarifies what they really intended to do all along," Jost said. "Congress had subjected itself to a requirement that applied to nobody else in the country."

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