ObamaCare: A bailout by any other name is still cronyism
The enrollment failure of ObamaCare is well documented – so much so that it has become the nation’s late-night talk show punch line. In fact, Moody’s changed the outlook for U.S. health insurers to negative from stable, as implementation of ObamaCare continues to create uncertainty for the industry. The sad reality is that millions of...
The enrollment failure of ObamaCare is well documented – so much so that it has become the nation’s late-night talk show punch line. In fact, Moody’s changed the outlook for U.S. health insurers to negative from stable, as implementation of ObamaCare continues to create uncertainty for the industry.
The sad reality is that millions of Americans have recently learned that: they cannot keep their plans or doctors; they will be paying more in premiums and/or deductibles; and many are seeing their work hours or jobs cut as a result of the law.
But they are in store for yet another unwelcome surprise: They will be on the hook for bailing out some of the same insurance companies that helped to pass ObamaCare.
Whether you want to call it a bailout or a subsidy, the Affordable Care Act contains provisions that will take billions from taxpayers and direct them to insurance companies operating under the ObamaCare health insurance exchanges. Phil Kerpen of American Commitment explains:
“Risk Corridors are a de facto bailout built into the structure of the law. As written and originally explained the provision would have smoothed out pricing risk by taking funds from insurers who made excess profits and transferring them to insurers who take losses. This was supposed to prevent companies from marketing specifically to healthier segments of the population and instead give them an incentive to simply enroll as many people as possible.
“But with the exchanges overall failing to attract enough healthy people, nearly every insurer is now expected to be in a loss position on their exchange plans, making the Risk Corridors a transfer not between companies but instead a direct pipeline of tax dollars from the U.S. Treasury to the coffers of insurers. As if the law’s massive subsidized and mandated demand weren’t enough.”
The health insurance companies could receive up to 80 percent of the money they lose in the ObamaCare exchanges, with a potential tab of about $47 billion. That is something that, despite the material it provides for late-night parody fodder, taxpayers won’t find amusing.
Proposed laws, such as the ObamaCare Taxpayers Bailout Prevention Act and the No Bailouts for Insurance Industry Act of 2014 are important first steps to revealing the true costs of this destructive law. The same Americans who are paying on the front-end – through higher premiums, higher deductibles and narrow provider networks – should not be on the hook for what amounts to a corporate welfare scheme.