The GOP Should Put ObamaCare to Good Use

Tony LoSasso And Kolisa Simon argue that to save money, Washington should replace the Affordable Care Act's premium subsidy system with the Federal Employees' Health Insurance Program (“FEMA”).

The Real Solution for ObamaCareIn 2025, the average monthly FEHB premium was $897 for an individual plan, compared to $497 for the average benchmark ObamaCare Silver plan.

Why? Federal employees are incentivized to purchase the most expensive plan. The government directly subsidizes 72% of the FEHB premium, regardless of the plan chosen. Employer-sponsored insurance premiums are tax-deductible. For a typical federal worker living in Washington, this means an additional subsidy of more than 11% after taxes. In other words, the government subsidizes more than 83% of insurance premiums, either through direct spending or through the tax code. If a federal employee chooses a plan that is $100 cheaper, they will retain less than $17 in savings.