Obamacare’s Insurers Are Receiving a Well-Deserved Lump of Coal

Loading

Naomi Lopez-Bauman:

It’s understandable that some big businesses believe Congress to be their very own Santa Claus. The legislature has been known to hand out preferential treatment, favors and earmarks at a speed that rivals St. Nicholas.

But this year is different, at least in the realm of health care. The same insurance industry that was complicit in crafting the calamitous Affordable Care Act (ACA), commonly known as Obamacare, has increasingly been seeking shelter from it. But Santa must have checked his list twice, because the industry is receiving a well-deserved lump of coal in its stocking this year, rather than more taxpayer largesse.

The CRomnibus spending bill, which was recently passed in the lame-duck Congress, protects federal taxpayers from a ​blank​-check bailout of the same health-care insurance providers that were complicit in passing the president’s health-insurance overhaul.

A little-known, but important, portion of the ACA includes provisions to pay insurers for their financial losses in the Obamacare exchanges. Known as “risk-corridor payments,” money is pooled from each insurer and added to revenue from a new Obamacare tax on health-insurance plans, which are costs that are passed on to consumers in the form of higher health-insurance premiums.

The issue at hand was whether these payments were supposed to be budget-neutral – limited to the amount of money available from insurers and the health plan tax revenue pool – or whether taxpayers could be on the hook for a blank check to the insurance industry if an insurance company’s losses were higher than originally predicted.

It should come as no surprise that the insurers had the blank-check bailout on their Christmas wish list. But the CRomnibus codifies that the ACA payments to insurers are budget-neutral – not the $47 billion or more that insurers were hoping for.

As it turns out, the insurers were already hedging their bets on the president’s health-insurance overhaul. Insurers participating in the federal health exchange did so this year only with the inclusion of an “escape hatch” protecting them from the possibility that the Supreme Court rules premium subsidies to insurers illegal in the vast majority of states. And that possibility is very real.

Read more

0 0 votes
Article Rating
Subscribe
Notify of
5 Comments
Inline Feedbacks
View all comments

The CRomnibus spending bill, which was recently passed in the lame-duck Congress, protects federal taxpayers from a ​blank​-check bailout of the same health-care insurance providers that were complicit in passing the president’s health-insurance overhaul.

They have also set the nation’s biggest investment banks up for an economy-crashing bailout via FDIC when their derivatives holdings tank. Can people who voted for this explain to the average savings account holder what a derivative actually is, how it has any real value whatsoever, and why it isn’t totally insane for the nation’s biggest too-big-to-fail banks to be encouraged to gamble with them?

The “bail-out” feature that Congress just eliminated from the ACA was based on a concept that is commonly known as “insurance,” the purpose of which is to reduce individual risk, thereby increasing the overall stability of a system.

The lunatic move to subject the entire FDIC system to the risks of derivative trading has the effect of decreasing the stability of the entire economic system. Essentially it places an unusually wobbly domino in a line of dominoes ready to do down one after the other.

This is your Congress, on stupid. I guess we get what we vote for.

If only progs like Dodd/Frank had their hand in the banking system everything would be hunkie dourie.

Do you believe that putting the FDIC insurance system and traditional savers at risk so that financial institutions can gamble with derivatives is a good idea? That’s one of the things that Dodd/Frank got right.

I think the post was about how the insurance companies supported Obama care and received promises like the ones promised to us: “If you like you policy, you can keep your policy. If you like your doctor, you can keep your doctor. This will save families $2500.” It shows that no one is immune from the lies of this administration.

@Greg:

So let me get this straight – you really think we are too stupid to see how you are trying to deflect away from the actual topic of conversation – which is yet another egregious failure of obamacare that conservatives predicted would occur?

And tell us, leftist, who is still in charge of the Senate that voted to pass the derivatives legislation that you are hyperventilating over while trying to ignore another steaming pile of obamaFAIL?