Late on Friday, February 12, the night before Supreme Court Justice Antonin Scalia was found dead during a hunting party in Texas on Valentine’s Day weekend, buried deep in what the New York Post calls “mind-numbing federal agency releases” came one from the Centers for Medicare and Medicaid Services (CMS) that stated $7.7 BILLION dollars would be available to reinsure the health insurers for money lost in trying to sell the pig in a poke known as ObamaCare:
For the 2015 benefit year, HHS anticipates that it will have $7.7 billion in reinsurance contributions to be used for reinsurance payments.
A careful reading of the actual document indicates that this is money collected actually for the express purpose of paying back health insurers losses that are stacking up for the private enterprise health insurance industry, and that the government doesn’t have it all just yet, but SHOULD by the end of 2016, which is not exactly true. What seems to be the case, is that the Obama Administration is writing an IOU to the Treasury in order to keep a number of insurance companies from jumping ship when it comes to the Affordable Care Act. It is no secret that the insurers are losing money hand over fist on ObamaCare. And the administration wants to keep as many as possible in the fold.
According to Modern Healthcare, this has to be the way it is because Republicans “handcuffed” the risk-corridor system during budget negotiations, and insisting that the risk corridors be “budget neutral” or paying for themselves. That happened in 2013 when no less than Senator Marco Rubio put a rider in the budget deal that took out the LEGAL bailouts of the health insurers.
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.
And so, to bail out the health insurance providers, the Obama Administration is making promises to pay against EXPECTED revenue, that, actually, the program is not entitled to. The New York Post explains:
This is money you and everyone else who already has insurance are forced to pay, called a reinsurance fee. You pay the fee whether you buy your own plan or get covered at work, even if your employer self-insures. You may be clueless about it, but the fee is buried in your premium or taken out of your compensation.
The text of the Affordable Care Act is clear as a bell on what this money can be used for.
Some of these annual fees — adding up to billions a year — belong to the public, not the insurance companies. The law states a fixed share “shall be deposited into the general fund of the Treasury of the United States and may not be used” to offset insurance companies’ losses.
Oops. Once again, Barack Obama and his merry band of executive orders harpies have been caught trying to go around Congress, and buried the information on what ended up being a wacked out news weekend loaded with distractions. After all they did it last year, why not try it again, right?