The talks involve John Boehner and Harry Reid, among others. | AP Photos Pols, aides may get Obamacare exemption

Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said.


A source close to the talks says: “Everyone has to hold hands on this and jump, or nothing is going to get done.”

Yet if Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public. By removing themselves from a key Obamacare component, lawmakers and aides would be held to a different standard than the people who put them in office.

( Also on POLITICO: GOP pulls contentious Obamacare bill)

Democrats, in particular, would take a public hammering as the traditional boosters of Obamacare. Republicans would undoubtedly attempt to shred them over any attempt to escape coverage by it, unless Boehner and Senate Minority Leader Mitch McConnell (R-Ky.) give Democrats cover by backing it.

There is concern in some quarters that the provision requiring lawmakers and staffers to join the exchanges, if it isn’t revised, could lead to a “brain drain” on Capitol Hill, as several sources close to the talks put it.

The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer — in this case , the federal government. If not, aides and lawmakers in both parties fear that staffers — especially low-paid junior aides — could be hit with thousands of dollars in new health care costs, prompting them to seek jobs elsewhere. Older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty.

( Also on POLITICO: Baucus will continue ACA push)

Plus, lawmakers — especially those with long careers in public service and smaller bank accounts — are also concerned about the hit to their own wallets.

House Minority Whip Steny Hoyer (D-Md.) is worried about the provision. The No. 2 House Democrat has personally raised the issue with Boehner and other party leaders, sources said.

“Mr. Hoyer is looking at this policy, like all other policies in the Affordable Care Act, to ensure they’re being implemented in a way that’s workable for everyone, including members and staff,” said Katie Grant, Hoyer’s communications director.

Several proposals have been submitted to the Office of Personnel Management, which will administer the benefits. One proposal exempts lawmakers and aides; the other exempts aides alone.

When asked about the high-level bipartisan talks, Michael Steel, a Boehner spokesman, said: “The speaker’s objective is to spare the entire country from the ravages of the president’s health care law. He is approached daily by American citizens, including members of Congress and staff, who want to be freed from its mandates. If the speaker has the opportunity to save anyone from Obamacare, he will.”

Reid’s office declined to comment about the bipartisan talks.

However, the idea of exempting lawmakers and aides from the exchanges has its detractors, including Rep. Henry Waxman (D-Calif.), a key Obamacare architect. Waxman thinks there is confusion about the content of the law. The Affordable Care Act, he said, mandates that the federal government will still subsidize and provide health plans obtained in the exchange. There will be no additional cost to lawmakers and Hill aides, he contends .

Follow @politico

“I think the law is pretty clear,” Waxman told POLITICO. “Members and their staffs should get their health insurance through the exchange; the federal government will offer them health insurance coverage that they obtained through the exchanges because we want to get the same health care coverage everybody else has available to them.”

Waxman has been working on this issue with congressional colleagues and the Obama administration.

Sen. Richard Burr (R-N.C.) said if OPM decides that the federal government doesn’t pick up “the 75 percent that they have been, then put yourself in the position of a lot of entry-level staff people who make $25,000 a year, and all of a sudden, they have a $7,000 a year health care tab? That would be devastating.”

Burr added: “And that makes up probably about 30 percent of the folks that work on the Senate side. Probably a larger portion on the House side. It would drastically change whether kids would have the ability to come up here out of college.”

Yet Burr, a vocal Obamacare opponent, is also flat-out opposed to exempting Congress from the exchange provision.

“I have no problems with Congress being under the same guidelines,” Burr said. “I think if this is going to be a disaster — which I think it’s going to be — we ought to enjoy it together with our constituents.”

Th e developing narrative is potentially brutal for congressional Democrats and the White House. The health care law, controversial since it was passed in 2010, has been a target of the right and, increasingly, the left. There are concerns about its cost, implementation and impact on small businesses. If the two sides agree on a fix, leadership is discussing attaching it to a must-pass bill, like the government-funding resolution or legislation to hike the nation’s debt limit.

Republicans, though, haven’t been able to coalesce around a legislative health care plan of their own, either. House Majority Leader Eric Cantor (R-Va.) pushed a bill this week that would shift funds from a health care prevention fund to create a high-risk pool for sick Americans. That bill couldn’t even get a vote on the House floor as conservatives revolted, embarrassing Cantor and his leadership team. GOP leadership pulled the bill.

But the secret talks about exempting Capitol Hill hands from the exchanges has the potential to be even more politically risky. During the 2009-10 battle over what’s now dubbed Obamacare, Republicans insisted that Capitol Hill hands must have the same health care as the rest of the American people. The measure was introduced by Sen. Chuck Grassley (R-Iowa), who spent months negotiating the details of the health care law but later became a major Obamacare critic.

The mandate on health exchanges doesn’t cover everyone. Aides in lawmakers’ personal offices must obtain health care through the exchanges but not committee staff. Lawmakers and aides older than 65 are covered by Medicare.

OPM also has to decide where the members and staffers would be covered. According to several people who have spoken with OPM officials, lawmakers would probably be in the exchange of the state they represent. But staffers would sign up in the state where they usually live — that means district office employees would join home state exchanges, and Capitol Hill staffers would mostly be in Washington, Virginia or Maryland.

Jennifer Haberkorn contributed to this report.