The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.
Another week, another legal kerfuffle over the implementation of the Affordable Care Act. Everyone agrees that, per the ACA, members of Congress and their staffers will have to go to the exchanges to get health insurance. The burning question—as politically salient as it is economically trivial—is who’s going to pay for it.
Like other large employers, Congress offers health insurance to its employees. But now that members and staffers must go on the exchanges, can Congress keep paying for that insurance? If not, members and staffers could still get federal subsidies (assuming they make less than 400% of the poverty level). Those subsidies, however, are tiny in comparison to the amount that Congress now spends for their health insurance. They’d face, in effect, an enormous pay cut (remember, employer-sponsored health insurance is a form of compensation). Some fear an exodus of staffers from the halls of Congress.
Is this really what the law requires? Some critics think so. They’re already crying foul about a pending rule from the Office of Personnel Management (OPM) that, according to press reports, would allow Congress to continue financing its employees’ health plans. Never mind that the administration hasn’t released its rule, much less its legal justification for it. The emerging storyline touches on themes of executive lawlessness, congressional impunity, and a broken statute. That’s sexy stuff by health-policy standards.
It’s also nonsense. All the ACA says is that “the only health plans that the Federal Government may make available to Members of Congress and congressional staff … shall be health plans that are … (I) created under this Act … or … (II) offered through an Exchange established under this Act.” §1312(d)(3)(D). That speaks to the kinds of health plans that members and staffers can get. But it says nothing—not one word—about prohibiting Congress from financing those health plans. To the contrary, the Act contemplates that Congress will still “make available” health insurance, strongly suggesting that it will continue to pay for that insurance.
It’s silly to think that Congress used this spare language to indiscriminately and dramatically cut the compensation of its members and staffers. As Justice Scalia has quipped, Congress does not “hide elephants in mouseholes.” (Maybe this isn’t an elephant, but it’s at least a good-sized dog.) If there were any doubt on the matter, it’s black-letter administrative law that an agency charged with administering an ambiguous statute—here, that’s OPM—gets to resolve that ambiguity. That should be the end of the matter.
Some have nonetheless argued that OPM, which is responsible for contracting with health-insurance plans on behalf of federal employees, doesn’t have the legal authority to contract with plans that are also offered on the exchanges. (“You can’t mix and match the two,” writes Peter Suderman at reason.com.) But why? Although there are some restrictions (they’re very general) on the plans that OPM can contract with, a health plan could in principle satisfy both OPM’s requirements and exchange requirements. So far as I can make out, no statute precludes the agency from contracting directly with exchange plans.
Even if I’m wrong about that, look carefully at the ACA’s language. Members and staffers can buy not only health plans “offered through an Exchange,” but also plans “created under this Act,” whether or not they’re offered on an exchange. What health plans are “created under this Act”? Well, the ACA, in §1344, instructs OPM to contract with health insurers to offer at least two “multi-state plans” on each of the exchanges. The idea was that these OPM-sponsored multi-state plans would foster competition. Why couldn’t OPM contract with, and Congress contribute to, these multi-state plans—outside the purview of the exchanges altogether?
Look, I have no idea how the administration will defend the new regulations that are apparently forthcoming from OPM. But even a cursory look shows that there’s more flexibility built into the ACA than the critics are willing to acknowledge. Before preemptively leveling accusations of illegality, maybe they should wait to see what the administration comes up with. I suppose the story then might not be as sexy; indeed, there might not be much of a story there at all. But it’s better to be right than provocative.