Does Ted Cruz really need to buy insurance through Obamacare?
When Sen. Ted Cruz, R-Texas, said Tuesday that he and his family would "presumably" purchase health insurance through an Obamacare exchange, the news sparked cries of hypocrisy from Democrats and progressives.
How ironic, they said, that one the fiercest opponents of the Affordable Care Act (ACA) would decide to use a program he's vowed to overturn. "Ted Cruz: Obamacare for me, but not for thee," quipped the @SenateDems Twitter feed, which is operated by staffers for Democratic Senate leaders.
Now, it turns out, the Cruz family might not purchase their insurance through an ACA exchange after all. Rick Tyler, a spokesman for Cruz's just-launched presidential bid, told CBS News the senator "is weighing all the available options to choose what's best for his family."
Cruz's current coverage, which he receives through his wife Heidi's job at Goldman-Sachs, will soon expire because Heidi is taking a leave of absence as the senator runs for president.
The furor that greeted Cruz's acknowledgment that he might purchase replacement coverage through an Obamacare exchange, though, raises the question: Does he have any other choice?
An amendment to the ACA, which passed in 2010, required lawmakers and some of their staffers to purchase their coverage through the law's D.C.-based exchange if they want to receive a subsidy.
Nebraska Sen. Chuck Grassley, the Republican behind that amendment, said members of Congress "need to go into the exchange so that we would have to go through the same red tape as every other citizen."
Cruz, though, has insisted that he doesn't want a subsidy, and he wouldn't accept one even if he does purchase insurance through D.C.'s Obamacare exchange.
"Suddenly, all the media goes, 'Ah ha ha ha, gotcha!' Because Cruz is now signing up for Obamacare," he told The Heritage Foundation's Daily Signal on Wednesday. "Listen, I have zero intention of taking any government subsidy or Obama subsidy. Rather, what I'm going to do is pay in the marketplace for health insurance for my family, just like millions of Americans."
Timothy Jost, a law professor at Washington and Lee University, told CBS News that it's worth remembering Cruz did receive subsidized coverage of a sort while his family was on his wife's plan.
"All of us who have employment-related insurance receive huge subsidies from the federal government because it's not taxable," he explained. "Given what Senator and Mrs. Cruz's tax bracket probably was, and how generous the Goldman-Sachs plan probably is, the subsidies that he probably got in terms of federal tax exclusions when he was insured on his wife's plan might very well have been greater than the subsidies he would get through his exchange."
Even if Cruz is now willing to pay full cost, though, his options are limited: there aren't any private insurance plans available to D.C. residents outside of the district's Obamacare-backed exchange.
"Individuals and small groups in D.C. that buy health insurance have to buy it on the D.C. exchange," explained Scott Graham, the Media Relations Manager at CareFirst Blue Cross and Blue Shield. "It's a closed market."
Cruz could potentially purchase coverage in Houston, where he maintains his primary residence. Because Texas did not set up its own state-based exchange, the Obamacare marketplace there is operated by the federal government -- but there are plenty private insurers in Texas outside of the ACA exchange who offer individual health plans.
"He could buy health insurance through an agent or broker in the individual market in Texas if he wanted to," said Jost.
But that might not be an ideal option, the professor added: "He might have a hard time finding a plan that would cover doctors in the D.C. area if he purchased health insurance in Houston."
Cruz could also potentially purchase COBRA insurance that would allow his family to remain on his wife's Goldman-Sachs plan even though she's taken a leave of absence from the firm.
The COBRA program requires employers to offer continuation coverage to spouses, children, and other dependents "when group health coverage would otherwise be lost due to certain specific events," according to the Department of Labor.
"He should be eligible for Cobra," Jost said, but it might be expensive. "He'd have to pay 102 percent of the cost of the Goldman Sachs plan, and that's likely to be considerably more expensive than" a plan purchased through an ACA exchange.
Of course, Cruz may ultimately conclude that keeping himself out of the Obamacare marketplace is politically worthwhile even if the cost is high, given that the potential political cost buying health insurance (subsidized or not) under a law he's intent on repealing.
Thus far, his team hasn't seemed too concerned about the optics. They've argued that Obamacare has dramatically reshaped the private health insurance marketplace, making it difficult for consumers to purchase coverage outside the ACA system.
"Obamacare has had a tremendously negative impact on all plans in terms of higher premiums, reduced coverage and fewer choices," Tyler said.
They've also advanced the argument that Cruz is simply following the law, even if he disagrees with it. "The senator will also continue to pay all the taxes he voted against," Tyler said.
If Cruz decides to purchase coverage through an ACA exchange, he can at least take solace in the fact that he's not the only Republican candidate in that boat. Kentucky Sen. Rand Paul, and Florida Sen. Marco Rubio, both eyeing bids of their own, have held their nose and purchased coverage through Obamacare's exchange as well.