As we noted last week, Congress screwed up the language of their health care bill at their own expense. But, thanks to Obama administration lawyers, members and their immediate personal staff might be able to keep their existing health insurance coverage — for now.

The problem, as Heritage and others noted, is that the bill’s language says they have legislated themselves out of their own coverage under the Federal Employees Health Benefits Program (FEHBP) and into the newly created health insurance exchanges they’re imposing on the states. Without the timely intervention of the administration’s lawyers, the language might require them to do so right away.

But the administration’s interpretation, which rescues Congress from its own handiwork, is not the only possible one. The new law doesn’t spell out when Congress will lose its current coverage. In such a case, the standard rule is that when a specific legislative provision has no effective date, the provision takes effect upon the date the law is enacted. The FEHBP-dumping provision has no date, but the health insurance exchanges do have an effective date: 2014. Under the standard rule, congressional members and staff would be up the proverbial creek without a paddle — or FEHBP coverage — for the next four years. Presumably, they would have to buy insurance coverage on the open market.

The Congressional Research Service (CRS) says “reasonable arguments” can be made that lawmakers can keep their FEHBP coverage until the state-operated exchanges or “other health plan” is made available to them. But that’s not the norm. According to CRS, “In general, when interpreting statutory language, courts often assume that Congress means what it says.”

Such an assumption would be a giant leap of faith. The screw-ups and unintended consequences in this massive legislation are too numerous to be ascribed to anything resembling pre-meditation.

Congress and its staff are lucky. The president’s team at the Office of Personnel Management, which administers the FEHBP, chose not to take Congress at its word, or follow the traditional canons of legislative construction. They must be — how shall we put it? — special. So, assuming there are no successful lawsuits to the contrary, OPM probably bought them a few years to ponder what they did to themselves — and their staffs — and their fellow countrymen. Too bad the latter can’t bet on getting any special fixes.

It is still far from clear what the White House’s new strategy to pass health care reform will be in the face of Scott Brown’s election to the Senate. But according to Federal News Radio negotiations between the House and Senate are still ongoing, including this victory for House Democrats:

Federal employees covered under some of the more expensive plans in the Federal Employees Heath Benefit Program now have some breathing room as well.

Federal workers had been left out of an earlier compromise on health care reform shielding union workers from a proposed 40-percent excise tax until 2018.

The office of Rep. Gerald Connolly (D-Va.) says he “personally called the White House to express his concern of leaving federal employees out of the deal.” An agreement reached Wednesday extends the exemption to federal employees through 2018 as well.

The Senate bill’s health insurance excise tax is terrible public policy. Although the insurance companies would technically make the tax payment (a 40% levy on insurance plans worth more than $8,000 a year for individuals) they would undoubtedly pass this cost along to employers purchasing the plans for their workers in the form of higher premiums. Employers, in turn, would pass that cost on to their workers by lowering other forms of compensation like wages. Once the excise tax is passed on to workers, the result is no different than an increase in their income taxes. Faced with the possibility of paying substantially higher taxes, many workers would logically look for ways to avoid the tax. The first way they could avoid it would be by reducing the value of their health benefits below the threshold. If workers take less expensive health care coverage, they would want higher wages so as not to experience a reduction in total compensation. But this would not allow them to escape higher taxes completely, since higher wages would also be taxed.

Instead of facing this mess, Congress has reportedly chosen to exempt federal workers … which last time we checked included Members of Congress.

Not only is Congress leaving the current inequities created by the federal tax treatment of health insurance in place, it is busy creating new ones.

Family Premiums. The Congressional Budget Office (CBO) estimates that under the House bill, the average premium in 2016 will be $15,000 and the average cost sharing will be $5,500 for a family policy or a total of $20,500. Under the Senate bill, the average premium will be $14,100 and the average cost sharing will be $5,000 for a family policy or a total of $19,100. Is the higher cost House plan better? How do we know? If the Senate can come in $1,400 lower than the House, could the price tag be lowered by another $1,400? If not, why not?

Under the House bill, a family of four with income of $30,000 will receive the $20,500 value for just $1,100, or less than $100 per month. The family will receive premium and cost sharing subsidies from their neighbors worth $19,400. Under the Senate bill, a family of four with income of $30,000 will receive premium and cost sharing subsidies worth $16,800, still quite generous. These subsidies are so generous in fact, that the House and Senate leaders don’t want millions of Americans to have them to buy private health insurance.

The Medicaid Solution. So, instead of providing these taxpayer subsidies, the House and Senate will put 15-20 million people into the Medicaid program where they are not eligible for the subsidies at all. It is “cheaper” for Congress to put people into Medicaid program, a welfare program, which pays doctors and hospitals at least 20-25 percent less than private health plans. Moreover, as the Chief Actuary of the Centers for Medicare and Medicaid Services warns, the cost will be lower under Medicaid because access to care will be more limited than under private coverage. Don’t expect the same level or quality of medical services.

New Inequities. Millions of low-income Americans who are insured through their employers will not be eligible for these new subsidies either. What do we suppose will happen when they find out that their neighbors- who make more money than they do- are receiving these huge taxpayer subsidies courtesy of Congress while they are locked into an employer plan with no choices and higher cost sharing?

The health care bill passed by the House tonight took another step towards transferring power over personal health care decisions from individuals to bureaucrats in Washington. The Republican alternative was a good strong first step of targeted reforms that are necessary to improve health care financing and delivery.

If it were to become law, the House bill would put the government in control of over half of all health care spending and would dramatically shift America’s health care system from one that is largely private to one that is subordinated to government control.

The bill engineers a massive expansion of the Medicaid, a welfare program that provides substandard care to lower-income and poor Americans and threatens state budgets. The addition of the public plan, a new federal health care entitlement, would add to the crushing tax burden Americans already face from exiting entitlements. Even worse, millions of Americans would be pushed out of their existing health care coverage, notwithstanding the promises of the President.

The bill would create massive bureaucracy. Under the bill, the new health care commissioner would in fact become a health care czar. This bureaucrat would exercise unprecedented power over the kinds of benefits and medical services available to individuals and families.

The bill also creates new inequities. While it would extent lavish subsidies to certain individuals, it would exclude those with employer-based coverage and would guarantee that others would be confined to substandard care in the Medicaid program.

Contrary to the promises of the President, the House bill would impose new taxes on all Americans regardless of class or income. The employer mandate and the individual mandate would tax the middle class. While the country is trying to recover from a deep and dangerous recession, it is ironic that the day after the jobless rate officially reached 10.2% that Congress would insist on imposing more taxes on individuals and businesses.

The President has insisted that reform should bend the curve on health care spending. This legislation makes a mockery of that goal. The true cost of the bill is in excess of the President’s $900 billion spending target — the full costs will run in the trillions.

The good news is the battle is not over. There is consensus in the U.S. for serious reform of the health care system. But, there is no consensus for a federal government takeover of 1/6th of the US economy.

The first step is to keep Congress in town. The second is to keep them monitored and available for whenever leaders want to summons them for backroom meetings—sometimes to discuss and sometimes to pressure and browbeat and offer deals. A “buddy system” is sometimes assigned so a fellow Congressman from the party’s whip team keeps tab on each undecided member’s whereabouts, their cell and other private phone numbers, the places they tend to hangout between votes, and similar information.

Members don’t like to be found and pressured. As one speaker noted at Thursday’s “House Call” tea party event at the U.S. Capitol: “There may be some members hiding right now. They may be in the basement. They may be in the cafeteria, pretending they’re not a Congressman.”

So special gatherings are created, not only to communicate but also to attract the reluctant to join their party’s herd. Then they can be culled out by party leaders for individual attention, much as a sheepdog picks out individual sheep from a flock.

That’s one benefit of scheduling a group meeting with President Obama, as party leaders have set for Saturday. It’s also a reason for scheduling other votes on the House floor, to flush individuals out of hiding and work them over. It’s common for members to rush into the chamber, cast a vote, and try to rush out before they’re caught. So multiple votes are scheduled.

It’s all part of the behind-the-scenes effort to whip crucial votes. It’s not unique to the health care vote. But it’s part of Congress that most people never see. Speaker Nancy Pelosi is taking a big risk with her self-imposed Saturday deadline. Her party has 258 House seats; she only needs 218 of them to support her.

For months she told the media she had the votes. Recent events demonstrate that she didn’t then and still doesn’t now. Pelosi therefore emboldens internal Democrat opposition if she cannot deliver. There’s already talk that Saturday’s deadline will be missed. The problem getting her own party’s approval exposes significant rifts among Democrats. Once Pelosi expends energy on this all-out effort, many within her own party might deny her a second chance if she cannot win this weekend.

Ernest Istook served 14 years as a U.S. Congressman, and is now a distinguished fellow at The Heritage Foundation

The facility is on-call and ready to provide Congress with some of the country’s best and most efficient government-run health care, ABC News reported. While the clinic, and at least six satellite office it support, admitted to providing physicals and flu shots, ABC News found in interviews with former physician staff that the facility provides “a wealth of primary care medical services to senators, representatives and Supreme Court justices.” This included regular visits by a consulting chiropractor to on-site physical therapy, with members often not charged for seeing specialists.

As Eduard Balbona, a Jacksonville, Fla., internist who worked as a staff physician in the facility in the 1990’s, told ABC News: “A member walked in and was generally walked right back into a physician’s office. They get good care. They are not rushed. They are examined thoroughly.”

On that score President Obama was right. It may have been, however, a bit of an understatement. Absent, of course, was how exactly all the savings he confidently predicted would materialize, how exactly the government would prevent employers from dumping all their employees into a government plan and how czars and boards would operate without bureaucrats coming between Americans and their doctors. Ah, details, details.

In fact, while he kept referring to “our plan” he never explained whose plan he meant. One of the two House plans? The one Senate plan that exists or the Finance one that’s under construction? What’s he actually for? What’s the President against?

To the question that all of America wanted an answer, to wit, is the President abandoning his stubborn attachment to a public plan, the President had no clear response. Or maybe he did. He appeared to draw a line on the sand at one point by saying, “I will not back down from the idea that, if Americans cannot find affordable coverage, we will provide you with a choice.” Maybe that was the clearest indication of the night that Barack Obama is still sticking to the public plan, to be introduced by whatever means. But a minute later he said he was open to other ideas!

As for the rest on this subject in a 45-minute speech, his 29th devoted to health care in nine months in office, Mr. Obama ducked behind the English language—or, more charitable observers would say, used it to its fullest extent. There was his promise, for example that “nothing in this plan will require you or your employer to change the coverage or the doctor you have.” [italics added] This is a change, even an improvement on past exertions.

Previously, the President had insisted that nobody would be forced to abandon the insurance plan they have. Last night he said nobody will be required. See the change? Of course, all he seems to mean is that the government won’t require you – he said nothing about what the consequences of the plan may prod your employer to do.

To critics, including analysts at The Heritage Foundation, who charge that many employers would gladly dump all their employees into his proposed exchange, leaving millions of American with no real choice but the public plan, President Obama mysteriously said that the government plan “would only be available to those who don’t have insurance.” But the congressional plans are open to smaller firms with insured workers. So what proposal is he referring to?

One could praise the President for showing moxie, as when he evoked America’s “self-reliance, our rugged individualism and our fierce defense of freedom” as he tried, yet again, to sell sweeping controls over one sixth of our economy. Less of a surprise was the decision to close the speech with an ode to the late Sen. Ted Kennedy. Just about everyone was waiting for the Camelot Moment.

And the President did stump for civility. Yes, the man who weeks ago told his opponents “I don’t want the folks who created the mess doing a lot of talking. I want them to just get out of the way,” said with hope in his eyes “I still believe we can replace acrimony with civility.”

He also threw Republicans a bone, or at least hoped that the nation would see it that way. He offered to look at a proposal near and dear to conservatives’ heart—tort reform. That is, reforming the legal system so that bad people will not game the medical malpractice system. Or, rather, Mr. Obama offered to send the proposal to the states and let them experiment with a few demonstrations of ideas — approved by his Health Secretary, of course.

But why not get serious with state experiment, not just for tort reform but for a range of reforms? In fact, that has been proposed in true bipartisan legislation the President seems to have overlooked. The 50 states are the proper laboratories to try out different proposals. But the states need Washington to give them the power to do so.

What we did not see, alas, was a willingness to start over and set aside those issues where the American people can’t agree – most importantly the public plan, the individual and employer mandates, a maze of new federal regulations that pre-empt existing laws, and a massive Medicaid expansion. There are ideas that really do have broad support. The key ones:

• Empower the states to explore ways of achieving the goals of affordable and accessible coverage for their citizens. Bi-partisan proposals to do this have been introduced in both the House and Senate. As welfare reform showed us, states are laboratories for change and can learn what works and what doesn’t.
• Extend tax relief for those who need help. Offering tax credit to middle class families in need by reforming the way the tax code treats health insurance. And instead of expanding Medicaid, providing lower-income families will assistance offset by other spending.

At the very least, Mr. Obama and the Democrats should stop trying to ignore reality; they should stop pretending that August didn’t happen, that there hasn’t been a national revolt against a government takeover of health care. They keep telling themselves—and thus keep hearing—that the Town Hall meetings of summer were concocted by FOX News and abetted by the Internet. Reality may need to set in before we can get real reform.

Many lawmakers and the Obama administration have made it clear they want to pass massive health care legislation that includes a contentious option for a government-run health insurance plan.

Americans are smart to be nervous. This attempt for the government to enter the insurance market directly to “keep insurance companies honest” and “increase competition” may sound benign. It’s not. It will erode competition and change how anyone with some form of health insurance gets and pays for health care services.

If, for example, Congress passed and the president signed America’s Affordable Health Choices Act of 2009 (H.R. 3200), the law would have devastating effects. According to the Lewin Group, a highly respected health care policy and management consulting firm, by the law’s third year:

• Forty-eight percent of privately insured Americans would transition out of private insurance. Out of an estimated 172.5 million people with private health insurance, there would be a decline of 83.4 million people.
• Fifty-six percent of Americans with employer-based coverage would lose their current insurance. Of the estimated 158.1 million Americans with employer-based coverage, 88.1 million people would be shifted out of their current employer-based plan.
• An estimated 34 percent of the uninsured in America would still lack coverage. Of about 49.1 million people without health insurance, the legislation would only reduce the uninsured by 32.6 million people, leaving 16.5 million people without coverage.

The bill would also harm doctors and hospitals. Lewin found that:

• Physicians would see their payment levels decline by $31.7 billion. While physician net income may increase under the bill primarily due to other Medicare changes, a public plan with Medicare-based payments would lower reimbursements. Today, Medicare physician payments are, on average, 81 percent of private payments.
• Hospitals could see their net annual income fall by $61.9 billion, which roughly eliminates hospital total margins. This significant loss in hospital income is also overwhelmingly attributable to the public plan using Medicare-based payments. Today, Medicare hospital payments are, on average, 68 percent of private payments.
• So while President Obama has repeatedly promised that Americans who are happy with their private health plans won’t have to change a thing, the incentives built into his approach suggest otherwise.

But there are alternatives that don’t involve a bureaucrat-centered, Washington-knows-best approach. Some in Congress are proposing reforms that would give consumers and state officials more decision-making power.

This would include giving a generous tax break to every working American enrolled in a private health-insurance plan, regardless of where they work. This would make health insurance more affordable, and it would allow folks to own their health policy (like auto- or life-insurance policies) and take it from job to job without a tax or regulatory penalty. People shouldn’t lose health insurance merely because they change jobs.

Sound legislation would also give state legislatures flexibility in using existing federal subsidies to expand health coverage or undertake far-reaching reforms of the state’s health insurance markets. The objective: to ensure that anyone, even those with pre-existing conditions, could get access to affordable health plans. Ideally, reforms could ensure they keep their coverage even if they become unemployed or change jobs.

Every state is different. The structure of the economy, the demographics and the health insurance markets vary from one place to the next. Federal lawmakers should offer state officials waivers from existing law and regulation, and also technical assistance, to enable each state to create a health care solution tailored to its unique needs.

And they should shelve the public option that the public is, rightly, up in arms about.

The surtax proposed by Rep. Charlie Rangel (D-NY) would stand independent of the income taxes Americans are already paying. Generally, a surtax is added onto an individual or business’s taxable income. However, in a maneuver to include more tax-filers into Congress’s double-tax treasure chest (or triple-tax if you invest in anything), Congress has decided to make the surtax applicable to your adjusted gross income, or AGI. Your AGI is what your income looks like before you take out deductions like state and local taxes, medical expenses, and mortgage interest payments. So it’s a higher number than your taxable income.

How much higher? American tax-filers reported over $8 trillion in Adjusted Gross Income in 2006, yet they were only taxed on less than $5.5 trillion of it. The difference between those two numbers might be able to pay for the current health care plan twice! Only 68% of the adjusted gross income of U.S. taxpayers was actually taxable in 2006, yet the current proposed health care bill wants to change the rules and start taxing even more money to help “control” health care costs.

So how does this surtax work? The government would take 1-5.4% from those families and small businesses with an AGI greater than $350,000 ($280,000 if you’re a single filer). Let’s say you’re a small business owner in Baltimore, Maryland with an AGI of $1,100,000, the amount listed in box #37 of your IRS 1040 form. Under this plan you will be taxed 5.4% on that $1,100,000, which comes to a bit more than $59,000. However, when calculating your income tax liability, the government provides you the option of applying a multitude of itemized deductions, found on a Schedule A Form. The total of your deductions can then be filled in on the second page of your 1040. So if you’re paying a 5.5% Maryland State tax, a 3.05% local tax, $5,000 in mortgage interest payments, and another $3,000 in medical expenses, those deductions would help lower the amount you’re liable for by way of income tax, but wouldn’t put a dent in your surtax contribution. In fact, the small business owner would pay approximately $15,000 if the surtax applied to his taxable income, but because it applies to his AGI, he or she has to pay more than $59,000. That’s more than a $44,000 difference! That $44,000 might force the business owner to cut costs somewhere, and that could mean somebody’s out of a job.

And if that’s not enough to cast doubt on the proposed tax hike, the surtax may actually increase in 2013. If the President and Congress are intent on saving or creating jobs, and allowing small businesses to compete on a level playing field, this surtax doesn’t match the rhetoric.