Media watch: Senator Cruz’s health insurance has a taxpayer cost

About Senator Ted Cruz’s health insurance, Ashley Parker, in The New York Times, reports,

“Ted is on my health care plan,” said Mrs. Cruz, who has worked in Goldman’s investment management division for eight years.

Catherine Frazier, a spokeswoman for the senator, confirmed the coverage, which Goldman said was worth at least $20,000 a year. “The senator is on his wife’s plan, which comes at no cost to the taxpayer and reflects a personal decision about what works best for their family,” she said.

This is an employer-sponsored plan. Unless Mrs. Cruz is paying the entire premium and Goldman is not offering coverage through a Section 125 “cafeteria” plan — both highly unlikely — then taxpayers are subsidizing it, as they do all such employer-sponsored health insurance. All health policy wonks know this. I would hope Senator Cruz, who gives long speeches aimed to influence health policy, knows it.

His spokeswoman, apparently, does not. That Catherine Frazier’s statement is almost certainly false is something I’d like to have seen mentioned in the article. The New York Times has done a disservice to its readers in failing this basic fact check.

I wonder if Ms. Frazier, Mrs. Cruz, or the Senator knows just how much taxpayers are subsidizing their coverage. In fact, the Senator and Mrs. Cruz are probably* getting a bigger tax break than the cost of coverage of a typical, non-elderly Medicaid beneficiary, or even two.

If the Senator truly wishes to be free of the health insurance assistance of taxpayers, he might consider instead getting coverage in the individual market. Such plans receive no tax subsidy and, given the level of his family’s income,* he would not qualify for premium assistance under the Affordable Care Act. (And, even if he did, he need not enroll in a plan that qualifies for such subsidies; No plans outside of exchanges will.)

That those in the group market get such a large tax break and those in the individual market do not might strike the Senator as an inefficient economic distortion. If so, he’d be agreeing with most economists. But proposals on what to do about it diverge. Some wish to extend the tax break to the individual market, costing taxpayers a fortune. Others want to repeal it in the group market, recouping hundreds of billions of dollars a year in forgone revenue.

I wonder which approach the Senator would prefer. Given the implications for the debt, I would think the choice would be an easy one. However, I’m not aware he’s on record one way or the other. (Are you?) Is the Senator prepared to endorse a policy consistent with his spokeswoman’s statement to New York Times, that his health insurance comes at no cost to the taxpayer?

* I don’t know the Cruz’s income with certainty. I think it’s safe to assume it puts them in one of the higher marginal tax rate brackets. A Senator’s salary is $174,000. Mrs. Cruz is a managing director at Goldman Sachs.


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