Josh Barro, Columnist

What’s So Bad About Grassley's Obamacare Amendment?

Far from being a political gimmick, the Grassley amendment may be the Trojan horse that finally kills the tax subsidy for employer-provided health care.

April 25, 2013 at 4:24 PM UTC

By Josh Barro

Josh Barro is the lead writer for the Ticker, Bloomberg View's blog on economics, finance and politics. His primary areas of interest include tax and fiscal policy, state and local government, and planning and land use. Previously, Barro was a Senior Fellow at the Manhattan Institute for Policy Research and a commercial real estate banker at Wells Fargo. He holds a bachelor's degree in psychology from Harvard and lives in Queens, New York.

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Ezra Klein and Brian Beutler are writing about today's latest mini-outrage: Some Congressional offices are looking for a workaround for the Grassley Amendment to the Affordable Care Act, which states that Congress can't offer its employees health plans that are not on the Obamacare insurance exchanges. Grassley devised the amendment as a "gotcha" during the debate over health reform. It was intended to demonstrate that congressional staff would want to avoid the exchanges; instead, Democrats surprised him by agreeing to make his proposal law.

The "problem" some are trying to address is that there's no way to provide a tax-advantaged employer subsidy of such plans. Low- and middle-income congressional staffers would qualify for the same income-based subsidies as other members of the public, but higher-paid staffers would have to pay full price for the plans, which could mean a significant financial hit compared with their current insurance.