The only candidate to formally announce his intention to run on the GOP's ticket for president in 2016 has inadvertently become the posterboy for Obamacare.
As little as three days ago, Ted Cruz, the Tea Party presidential hopeful, was lambasting the Affordable Care Act (a.k.a., Obamacare) in front of his student audience at Liberty University. There, he also announced his plans to run for president.
And even though defunding the ACA has been one of Cruz’s top priorities since his election in 2012, he naively admitted on Tuesday night to needing to sign up for coverage through an exchange that was authorized under the law. As CNN reported, Cruz says he will buy his health care from the federal health care exchange known as the Small Business Health Options Program (SHOP), following his wife’s decision to leave her job as a managing director at Goldman Sachs, one of Wall Street’s largest investment banks. She is leaving her job to help run Cruz’s campaign, and had previously covered her husband under the bank's private plan.
"We'll be getting new health insurance and we'll presumably do it through my job with the Senate, and so we'll be on the federal exchange with millions of others on the federal exchange," Cruz told CNN newscaster Dana Bash.
In a sense, Cruz has just proved one of the key benefits of the ACA--particularly as far as entrepreneurs are concerned. By getting health insurance on a federal exchange, he can seek the presidential nomination without fear of a gap in coverage, labor experts say. Cruz is thereby fulfilling one of the health law's objectives, which is to free people from dependence on jobs simply because they offer health insurance.
To be sure, it’s not exactly an apples to apples comparison, as Cruz would be shifting to the health insurance policy offered by the Senate, his employer. Yet, the principle is the same, says Craig Garthwaite, an assistant professor of strategy at Northwestern University’s Kellogg School.
“Cruz’s situation makes a good anecdotal point about the flexibility that the exchanges have allowed people,” Garthwaite says. Garthwaite has studied the impact of public health care on the labor supply, and has postulated that the ACA could result in as many as 1 million people leaving their jobs to start their own companies.
Perhaps a better comparison would be Senator Rand Paul, the junior senator from Kentucky, who is also expected to seek the Republican presidential nomination, Garthwaite says. Kentucky law prohibits a candidate from seeking two elected offices simultaneously, and as Paul would be up for reelection to the Senate in 2016 as well, he’d likely be forced to step down from that role. In that case, he could similarly look to the federal exchange for his health insurance, Garthwaite says, as millions of others do now when they lack an employer.
Of course all of this may be moot in time. The Supreme Court is now considering a challenge to the ACA, which will determine the fate of the federal exchanges this summer. The federal exchange provides subsidies in 34 states that have not set up their own health care exchanges, allowing as many as 8 million consumers to purchase affordable care. The court will rule, in a case called King vs. Burwell, whether the subsidies are permitted by the ACA. A ruling against the subsidies would cripple the ACA, legal experts say.
That wouldn't just put members of Congress in a bind. Some small business owners say the ACA has helped them cut down significantly on health care costs. One such owner is Mitch Goldstone, president and chief executive of"¨ ScanMyPhotos.com, an online photo archiving business based in Irvine, California.
“I have always had a personal mandate that my employees need to have health care coverage,” Goldstone says. “And once the ACA went into effect, my rates went down and my employees were able to get more coverage.”
California operates its own exchange, which allows both businesses and consumers to purchase health insurance. State run exchanges, however, are also eligible for federal subsidies, such as those provided through the federal exchanges. Goldstone estimates his health care costs for his 22 employees have decreased more than 10 percent in each of the past two years. Currently, the ACA only requires employers with 100 or more employees to offer their full-time workers coverage, or face a tax penalty.
“The ACA has been very effective and I’m very pleased with it,” Goldstone says.
Cruz’s office did not return a request for comment.