It is subsidized by their employer (the Federal government), just like many of us get employer-subsidized insurance, though I think the government kicks in quite a bit. To wit:
Politicians are part of the Federal Employee Health Benefit Program. They have a choice of between 5 and 10 health plans in each city. Some are HMOs, some are regular insurance with preferred provider programs. They select a plan they like, the federal government pays a large portion of the premium, and they pay the rest. For more expensive plans with a lot of choices of doctors and hospitals and more services, Senators and Congressmen pay more. For the basic plan they pay a little premium. Not every plan offered in a city is included — they are screened by the Office of Personnel Management.
http://www.washingtonmonthly.com/archives/individual/2005_06/006478.phpFar be it from me to interrupt a good thrashing of Lindsey Graham, but when untruths are flung around as if they were facts, it's time to point it out. And that includes the absolutely false claim (above) that senators get free limos and housing. They do not.
If we really want to fix health insurance and health care, we can't just create bogeymen and play fast and free with the facts. That's the Republican way, not ours.
ADDENDUM: If you want to see exactly how much they pay, here are the rates for HMOs:
http://opm.gov/insure/health/rates/nonpostalhmo2009.pdf
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