Back on the homefront regarding chronic and pressing domestic issues not related to immigration and veterans affairs, there’s this little thing called the “Affordable Care Act,” or as we Americans not so affectionately call it: ObamaCare It was supposed to solve all sorts of health insurance issues when it was ramrodded through Congress in 2010 before anyone knew what was in it. The Speaker at the time did say it had to be passed to find out.
Well, here we are, a little past five years later, and the insurers, the people who pool all that protection and racket money from their victims, uh, customers that pays out when one goes to the doctor OR has a major medical event, are fleeing the “state exchanges” that were supposed to advertise affordable insurance like rats off of a sinking continent. Why? Most people are thinking that it was just the weight of the law finally calling TIMBER! on the pricing. But the truth is that the built in subsidies that would keep the exchanges going despite the high prices to consumers that weren’t going to be bought – and essentially provide annual bailouts to the insurance companies AND the state exchanges for their participation – were severely undercut by a rider put into place in a budget deal two years ago thanks to one Senator Marco Rubio. From The Hill:
The angst in the industry centers on an obscure program in the healthcare law known as “risk corridors” that was designed to shield insurers against losses.
Rubio in 2013 went on the warpath against the program, decrying it as a “taxpayer bailout.” He penned op-eds against it, testified about it as the star witness at a House Oversight Committee hearing and even made his case to top House Republicans including then-Speaker John Boehner (R-Ohio).
“There is a problem with the way [ObamaCare] exchanges are now designed that have not yet received the attention they deserve, but I promise you’re going to be hearing a lot about it in the days to come,” Rubio said in a Senate floor speech in early 2014.
While Rubio’s attempt to scrap risk corridors altogether was unsuccessful, his push contributed to a policy rider that was inserted into a 1,603-page spending bill passed at the end of 2014.
Under the provision, which is still in effect, the Department of Health and Human Services (HHS) could no longer tap other accounts — such as its overall appropriations or its Medicare funding — to fund the risk corridors program.
This year, the fed can pay thirteen cents per dollar lost. The co-ops which were billed as the affordable option could not afford to operate on that and closed. For people actually in the insurance business, that kind of reimbursement ain’t going to cut it. The “risk corridors” program cannot fund itself (or be “budget-neutral”), and because of that Rubio rider which says HHS can’t cannibalize from other pots of money to prop up the exchanges, the federal government cannot guarantee to cover losses as the insurers incur them while we all are trying to navigate through the minefield of ObamaCare. The insurers are cutting those losses and getting out before any more damage can be done to their bottom lines. (A year early, but we’ll take what we can get.)
Ed Morrissey over at HotAir calls this spike to the heart of the hot air balloon of ObamaCare “mundane,” like a Monday detail. Maybe, but not every ship sinks due to hitting an iceberg, or running into a sea wall. Rubio is right: if ObamaCare was ever going to work, the “risk corridors” should not be needed. The fact that there were built in bail-outs to the system should be rather telling.
So, did Rubio’s rider in the 2014 budget deal trigger the death spiral that the ObamaCare exchanges are now experiencing? It is an interesting question. But, more importantly, the death spirals are going to yield a choice for the American government and people, not necessarily in that order. Single payer, which is a socialist/Democratic wet dream, or scrap the whole thing and go with market forces including health savings accounts, catastrophic insurance options, and insurance pools for those who want them.
And THAT – right up there with choices for potentially open Supreme Court Justice slots – should be one of the more important deciding factors for the people in the field of 2016 Presidential candidates and the election.
Not long after Rubio’s rider became law, Blue Cross Blue Shield warned (for reasons of self-interest, mainly) that the death spiral would force the government into a single-payer system. Much depends on what comes afterward, and who gets to make those decisions. A Republican Congress won’t pass a single-payer system, but a Democratic president won’t sign a repeal of ObamaCare. If the collapse begins in October 2016 with United and possibly other insurers parachuting out of the individual marketplaces, then a Republican president would be in good position to sign a repeal — and would have a lot more likelihood of getting elected to boot. Otherwise, what might happen is that the system crashes, and nothing follows for several years while the taxes and the mandates still apply.
If UnitedHealthCare actually exits the ObamaCare marketplace – and the push is on to keep them in the fold – that’s most of the big boys opting out, and a collapse of the actual insurance aspect of the “Affordable” Care Act. All because the permanent bail-outs no longer can pull cash from just anywhere in the Health and Human Services budget.
This episode in the American left’s century long ill-fated love affair with socialized medicine is not over yet, so, Rubio should hold off on the victory laps, but it was one battle won without anyone noticing until it was too late. He took a page out of the leftist handbook. For THAT, Senator Rubio deserves all the credit in the world.