Alexandria Ocasio-Cortez Doesn’t Understand How Obamacare’s Exchanges Work

On Twitter Sunday evening, Rep. Alexandria Ocasio-Cortez (D-N.Y.) complained about what she viewed as the daunting prospect of having to choose her health insurance plan for 2020.

It’s not the first time Ocasio-Cortez has taken issue with the health coverage for members of Congress. She griped about the process last year, as a newly elected official just taking her seat.

But, as someone who has gone through the process of buying health insurance as a DC resident for years, I can characterize most of the points she makes in the tweet as inaccurate, or rooted in the special privilege she receives as a member of Congress.

She’s Not Buying ‘Off the Exchange’

To start with, Ocasio-Cortez claimed that “Members of Congress also have to buy their plans off the Exchange.” That statement contains numerous false elements. Most obviously, she cannot buy her insurance off the exchange because the District of Columbia abolished its private insurance market “off the Exchange.”

Upon seeing her tweet, I went to eHealthInsurance, a private market away from the government-run exchange, and tried to search for a plan. (Disclosure: I used to represent eHealth more than a decade ago as a paid lobbyist.) When I typed in a DC-based ZIP code, I found the following:

eHealth doesn’t offer insurance plans in the District of Columbia, because it can’t offer them. DC law prohibits anyone but the exchange from selling insurance to individuals.

Rather than purchasing coverage “off the Exchange,” Ocasio-Cortez buys her health insurance through DC’s small business exchange, as opposed to its marketplace for individuals. As a Congressional Research Service paper on health coverage for members of Congress and their staff explains, both groups buy insurance through the DC small business exchange to obtain their (illegal) employer subsidy.

Admittedly, Ocasio-Cortez may have meant “from the Exchange” when she said “off the Exchange.” But her imprecise language implies that she does not understand the important distinction between buying plans from the Exchange directly and not doing so. (Only Exchange-purchased plans qualify for subsidies under the Obamacare statute.)

She Gets Access to More Plans as a Member of Congress

Ocasio-Cortez complained about having to choose from 66 different insurance plans. She wouldn’t have that problem if she weren’t a member of Congress. People who buy insurance on DC’s individual exchange have far fewer options. I know, because I have to buy coverage there. Take a look at the “choices” my personalized webpage presented to me: Only 23 plans—about one-third the number available to Ocasio-Cortez:

Some may think that 23 plans still represent a large number to choose from, but my reality proved far different. To begin with, those plans come from only two carriers: CareFirst Blue Cross Blue Shield and Kaiser Permanente, which only offers HMO options. If you don’t want to get locked into an HMO’s provider network—and I don’t—you have exactly one choice of carrier: CareFirst.

Couple my preference for non-HMO coverage with my desire for insurance that includes a health savings account option, and I ended up with only two plans to choose from: CareFirst’s Bronze HSA plan, and its Gold HSA plan.

I would prefer more choices for health insurance. I would particularly appreciate the opportunity to buy coverage that doesn’t need to comply with the Obamacare insurance regulations that have driven up premiums and priced millions of people out of coverage. But DC’s insurance regulators have prohibited carriers from offering non-complaint plans, because they’re from the government and they’re here to help.

She Gets Special Privileges as a Member of Congress

To say that members of Congress and congressional staff receive kid-glove treatment from the DC small business exchange would put it mildly. This flyer (from 2013) shows that the DC exchange conducted no fewer than 12 separate in-person enrollment events for members and staff during Obamacare’s first open enrollment period.

Congressional staff confirmed to me that the in-person enrollment sessions continued on Capitol Hill this year. Congressional staff also confirmed that House and Senate benefits counselors can walk them through the entire enrollment process.

Even as an individual DC exchange participant, I received no fewer than five separate e-mails, starting on Friday afternoon, reminding me that Sunday represented the last day to sign up for coverage taking effect on January 1. The timing of Ocasio-Cortez’ tweet suggests that she waited until the last minute to examine her coverage options, but she can’t say she wasn’t warned. Maybe if she and her colleagues spent less time focused on impeachment, Ocasio-Cortez could have found more time to select her plan sooner?

Ocasio-Cortez Gets an Illegal Subsidy

I and others have made this point before: members of Congress and their staff represent the only group that can receive a subsidy from their employer on the exchange. That subsidy came through a rule promulgated by the Office of Personnel Management in 2013, but several analyses have called that rule illegal.

Ocasio-Cortez claimed that “Members of Congress have to buy their plans off the Exchange.” Just as the off-exchange claim holds no basis in fact, she and other members of Congress do not have to buy plans via the DC small business exchange. Nothing in law forces them to do so—unless they want to receive the (illegal) subsidy.

In fact, at least one member of Congress has turned down the (illegal) congressional subsidy. Dr. Michael Burgess frequently mentions at hearings, including the House Energy and Commerce Committee hearing on single payer last week, that he buys his own coverage with his own money, not taxpayer funds. As someone who earns less than members of Congress do, and has no access to (illegal) insurance subsidies, I appreciate Burgess’ integrity in this regard.

If Ocasio-Cortez wanted to do something other than complain—and if she didn’t want so many choices—she could ditch the special, and illegal, subsidies she receives as a member of Congress, and buy coverage with the hoi polloi like me. She’s welcome to do so any time she likes, but I’m not holding my breath.

UPDATE: This post was updated after publication to clarify potential interpretations of Ocasio-Cortez’ comments about “off the Exchange” coverage.

This post was originally published at The Federalist.

Seniors Find They CAN’T Keep Their Current Coverage

An article in the Marin Independent Journal today profiles a decision by Anthem Blue Cross to terminate its Medicare Advantage plan, resulting in more than 100,000 California seniors losing access to their current coverage:

Ng said Anthem Blue Cross decided to end its [Medicare] Advantage plan because otherwise, rising costs would have required it to either increase premiums or reduce benefits.

Wanda Jones, president of San Francisco’s New Century Healthcare Institute, said Anthem Blue Cross also may be reacting to changes in federal regulation of Advantage plans that are being implemented as part of health care reform.

“The feds have let these plans know that they intend to make them roll back their costs to match Medicare basic,” Jones said. “It’s Blue Cross wanting to cut its potential losses before they occur.”

Anthem’s decision will affect 113,000 Medicare beneficiaries statewide, and decisions by other health plans to drop their Advantage plans will force another 37,000 beneficiaries in California to switch plans, said Jack Cheevers, a Medicare spokesman.

The article also notes that “Anthem’s exit leaves Kaiser Permanente as the only private company offering an Advantage plan in Marin” County – meaning seniors there will NOT have a choice of plans.

Last week, Speaker Pelosi admitted that Democrats “took a half a trillion dollars out of Medicare” in Obamacare, to pay for costly new entitlements.  the article once again illustrates how taking that money out of Medicare has affected seniors – higher premiums, reduced benefits, dropped coverage, and less choice.

As a reminder, the Obama campaign platform promised that “you will not have to change plans.  For those who have insurance now, nothing will change under the Obama plan – except that you will pay less.”  Today’s development once again proves how that promise has fallen short for hundreds of thousands of seniors.

Update on Donald Berwick and Conflicts of Interest

Late yesterday afternoon CMS Administrator Donald Berwick sent a letter to Sen. Grassley responding to Sen. Grassley’s July 29 letter to Dr. Berwick that he disclose information regarding the donors who funded the Institute for Healthcare Improvement (IHI) during Dr. Berwick’s time as its CEO.  The letter only discusses conflict-of-interest issues, and does not represent the “point-by-point rebuttal” to critics of his controversial writings that the New York Times reported last month Dr. Berwick is preparing.  Three interesting points of note from the letter:

  • With regard to Sen. Grassley’s specific request for more information regarding IHI’s donors, Dr. Berwick responded that “because the information you requested includes non-public documents in the possession of my now former employer, it is not within my power to comply with your entire request.”  However, as Sen. Grassley’s letter noted, Finance Committee staff first requested the IHI donor information from Dr. Berwick on June 4, 2010 – more than one month prior to Dr. Berwick’s recess appointment, while he was still head of IHI.  In other words, Dr. Berwick had the power to compel disclosure of IHI’s funding sources while he still headed that organization, but chose not to do so prior to his appointment – and is now attempting to use his recess appointment as a justification to keep the information private.
  • In response to Sen. Grassley’s request about ethics waivers, Dr. Berwick replied that “two of my former clients – Kaiser Permanente and The Commonwealth Fund – would have a particularly significant role in providing input to officials at CMS on policy matters related to health care quality, Medicare payment reform, and health care reform implementation, and that it would therefore be important for me to participate in discussions that are likely to include participation by The Commonwealth Fund or Kaiser Permanente.”  Dr. Berwick therefore said he will shortly seek an ethics waiver regarding these two former clients.  Some may note with interest the logic that nominees should recuse themselves from matters involving former clients – unless those clients’ interests before the agency are “particularly significant,” in which case the nominee can apply for a waiver.  However, Dr. Berwick did claim that his ethics waiver would be limited, and he would not participate in any matter regarding these two parties “that has a direct and predictable effect on the[ir] financial interest…including such matters as contracts, grants” and other similar proceedings.
  • With regard to Dr. Berwick’s relationship with IHI, he claimed that upon his resignation from IHI “I forfeited all benefits from IHI except” his supplemental executive pension.  Therefore, Dr. Berwick wrote that “IHI does not currently and will not provide any benefits to me or my family, including health care coverage.”  As previously noted here and elsewhere, IHI noted in its financial statements that in 2003 it “established a postretirement health benefit plan” for Dr. Berwick, which offered coverage “from retirement until death.”

Sadly, Dr. Berwick’s apparent lack of transparency regarding his financial dealings is consistent with the Administration’s public relations strategy of not making Dr. Berwick available for interviews.  But it’s yet another broken promise from an Administration that pledged “an unmatched level of transparency, participation, and accountability.”  And the fact that Dr. Berwick chose not to disclose IHI’s financial information when he had the power to do so – and has not so much as taken a single question in public from Members of Congress or members of the press – speaks to the controversial nature of both his appointment and the health care law he will implement.