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Analyst Phil Kerpen Reveals Obamacare Scheme That Gave Congress Free Health Care

Analyst Phil Kerpen Reveals Obamacare Scheme That Gave Congress Free Health Care Read Transcript

With us now from Washington, to talk

about this special deal for Congress on Obamacare,

is Phil Kerpen.

He's the president of American commitment and a leading

free market policy analyst.

I've read about this, and I am appalled.

I literally am appalled.

What did they do, and how did they make this deal

behind the scenes?

It really is outrageous.

When the Obamacare law was being written,

one of the things the American people were very clear about

was, if you're designing a new health care

system for the rest of us, you need

to be willing to put yourselves in it.

To show that it actually is a good system, actually

is quality, actually is affordable,

all these other promises that you're making.

And so they actually did that.

In the law itself, they included something called the section

1312 (d)(3)(D) that terminated the previous employer coverage

that members of Congress had under the federal employee

health benefits plan and required them to go

into Obamacare.

It did not provide for any employer contribution.

But as we were getting close to this provision

taking effect in 2014, members of Congress started going crazy

saying, how could we possibly pay?

This is going to cost thousands and thousands of dollars.

They didn't want to vote to change the law they had passed,

because that would have been very damaging for them


So they went to President Obama, and they quietly,

behind the scenes, said, hey, can you bail us out

of our own Obamacare law.

And President Obama, understanding

that it would have been unseemly for them

to reopen the law and so forth, he said, yeah, no problem.

And as you mentioned, he directed the Federal Office

of Personnel Management to authorize an employer

contribution for members of Congress,

despite the fact there is no such contribution provided

by law.

But they had a practical problem,

which is the regular Obamacare exchange does not legally allow

and has no logistical mechanism for an employer contribution.

So what they did to implement this scheme is they said,

we'll have the House and Senate pretend to be small businesses,

and we'll put them in the District of Columbia Small

Business Exchange.

And then we'll make taxpayer-funded employer

contributions to cover the cost of premiums

for members of Congress.

And in fact, we learned through Judicial Watch's FOIA

litigation that they filed just two forms certifying

the House of Representatives as a small business with less

than 50 employees, even though it has 435 members

and thousands of staffers.

And the US Senate as a small business

with less than 50 employees, even though it has 100 senators

and thousands of staffers.

And this scheme has continued to this day.

It began in 2013, it continues to this day.

You and I and all of your viewers

are paying the premiums for health insurance for members

of Congress, despite the fact the law said

they were supposed to be in Obamacare, like anyone

else without employer coverage.

Phil, I'm horrified at the hypocrisy,

especially the Republicans who would not

vote together to repeal this monstrosity call Obamacare.

Is it because they're taking that subsidy too,

and how much is the subsidy, by the way,

that each guy's getting?

Is that for the members of Congress

and each of their staffers, and how far does that go,

that subsidy?

It's for members of Congress and for their staffers.

It is 72% of the total premiums.

So it varies by plan, depending on which plan they pick,

and there are a lot of different choices in the Small Business

Exchange in DC, unlike most of the rest

of the country in Obamacare.

And so it varies, but it can be as

much as that $12,000 for each individual, which

is a lot of money.

And it really insulates them from the cost of Obamacare,

and the whole point of this provision

was to make them feel the pain if it didn't work.

Well, say I'm a little guy out in the boondocks,

and I've got these enormous premiums

and these huge deductibles, which really

make my insurance ineffective.

And you are saying the government

is going to pick up 72% of the premiums of every one

of those-- every staffer, every congressman, every senator,

every one of them is going to get that kind of subsidy?

Is that what you just said?

They are presently receiving that subsidy, and in my view

it's unlawful, and I hope President Trump does end it.

Well, why hasn't there been some outcry,

or is it just so hidden that nobody knows about it yet?

Well, I think there has been some outcry.

Everyone I've talked to about it has been outraged,

and it's beginning to get more attention and a little bit

more coverage.

But one of the challenges on an issue like this

is, when both parties in Washington DC

benefit from something, it's hard to shine

a spotlight on it.

You don't have those natural allies

and that natural platform to raise the issue.

And so it's been a bit of a challenge from that standpoint

because you're right, Republicans and Democrats

have been taking advantage of this.

I remember Phil Graham talked about some group

he said the public will be hunting them down like dogs.

I think the public ought to go after this in a big way,

but what can Trump do about it?

You say this was an executive order from Obama declaring this

a small business, and he can change it?

Can Trump change that?

Yeah, absolutely.

This deal was done by a rule making at the Federal

Office of Personnel Management.

It can be reversed in the same way,

and President Trump can and should

direct the Federal Office of Personnel Management

to rescind the Obama rule.

And to issue a new rule that makes clear

that members of Congress are entitled

to no so-called employer contribution

and will have to pay for their own Obamacare premiums.

And I think if he did that, they would

have a very strong incentive to actually get

a repeal and reform bill done, because they wouldn't feel

personal relief for their own family finances

until they provide a relief for the rest of America.

Phil, I've read that there's as many as--

I don't know the number--

3,000 states or so, or counties, that

are losing their exchanges, only have one payer,

and many of these insurance companies

are asking for as much as 30% increase in premiums.

Do you know how that affects--

what are the numbers out there in relation

to the average person now?

Well, the number of counties in America

that are going to have only zero or one

insurance company in the 2018 plan

year has now grown to over 40% of all counties in America.

So over 40% of the country geographically

will have zero or one insurance company

left in Obamacare for the 2018 plan year,

and you're right about premiums.

They've already on average more than doubled in the four years

that Obamacare has been in effect,

and we're looking at an average increase again of about 30%

on top of them already doubling in most places.

And so this thing is really breaking down.

The insurance companies can't make it work,

which is why they're fleeing.

And for the limited insurance companies that

are left, they're basically telling their regulators, look,

you need to give us another huge premium increase,

or we're going to leave also.

And so the whole thing is sort of in meltdown right now,

and that's why it's so bizarre how much denial there

is in Washington.

They seem to think this is optional,

but it's not optional.

This is mandatory work that they've

got to get done for the American people.

In an average policy, the deductible

is what's killing people, because they

have to pay up to that deductible

before they can start getting insurance.

How does that work, and how much are those deductibles?

The deductibles have also risen pretty dramatically,

and so you're looking at a lot of policies

now in the exchanges that have deductibles of $5,000, $6,000,

$7,000 in some cases.

Which means even when people are paying very, very

high premiums, you're right, they're not

able to access those benefits.

They're still out-of-pocket when they actually

have medical needs, and there are a lot of stories

out there about people who are foregoing

needed medical treatment, even though they're

notionally insured, because they can't afford those deductibles.

And this is one of the central features,

I think, of the replace bill that they've got to get done.

Is they've got to have help for people

to pay for those deductibles in the form of expanding health

savings accounts.

So that people can put their own pretax money away

to pay for those deductibles, as well as assistance.

I believe, the form that the subsidies take in a new bill

should go directly into those health savings accounts.

So lower income people will have that money

to save for their deductibles, and they can save it

across years as well.

So if you have a healthy year, you can save that money

and use it the next year, when you might

need it to pay for deductibles.

Phil, thank you for the work you're doing.

I really appreciate it, Phil Kerpen.


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