Senator Cruz's Health Insurance Plan Not "Cost-Free" for US Taxpayers

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The New York Times’ recent profile of Heidi Nelson Cruz, the wife of Senator Ted Cruz who is in Iowa again capitalizing on his exposure during the shutdown controversy, confirmed that the Senator is on her health insurance plan issued through her employer, Goldman Sachs. It’s a delightful bit of synergy for liberals—the main opponent of insurance subsidies for lower- and middle-income families, gets his health insurance from one of the main “villains” of the 2008 financial crisis from which our economy is still trying to recover.

Yet, those who support Senator Cruz are unfazed by this news. For them, it reaffirms his GOP bona fides, using his wife’s insurance policy rather than getting on the “government” plan entitled to him as a Republican senator. A spokesman told The New York Times that the senator’s coverage “comes at no cost to the taxpayer.”

However, according to The Huffington Post and former chief of staff on Congress’s Joint Committee on Taxation, Edward Kleinbard, “[o]f course there’s a cost to the taxpayers.” Lest this be considered rhetorical, he specified the cost: $8,500. The Cruz healthcare plan costs $20,000 per year, which Kleinbard says amounts to untaxed income.

If instead they were given the money as income to purchase private healthcare, they would be charged about $8,500 in taxes. “Instead of getting the compensation in cash and then shopping for insurance,” Kleinbard says, “they’re getting an $8,500 subsidy.” Economist Dean Baker from the Center for Economic and Policy Research agrees with this interpretation, pointing out on their blog that “[t]his is far larger than the subsidy that most people receive in the exchanges.”

While it is unclear how damning—if at all—this revelation will be for Cruz, it certainly does add a dimension to him worth considering about how he frames his world-view.