Posted on 01/30/2014 12:14:21 PM PST by Kaslin
Last week, Moody’s rating agency lowered the outlook for health insurers from stable to negative, blaming Obamacare. Few Americans will shed tears for insurance companies. But the Moody’s announcement is a warning sign to taxpayers. They’ll be getting clobbered. Section 1342 of the Affordable Care Act forces taxpayers to make insurers whole for most of the losses incurred selling Obamacare exchange plans through 2016. The bailout is designed to conceal the failure of the president’s signature health law until he is out of office.
No one in the Obama administration talked up the advantages of bailing out insurers. It was kept under wraps until the fall of 2013. That’s when five to six million health plans were cancelled because they didn’t comply with Obamacare’s one-size- fits all coverage requirements effective January 1, 2014. . Insurers developed new plans, as the health law required, set premiums (generally higher) and sent out notices cancelling the old plans.
That caused public outrage. Trying to quell it, the president ignored his own law and told insurance companies on November 14 they could keep selling the old plans. Insurers were caught off guard. They predicted there would be less demand for their new plans, and they’d lose money.
Here’s where the plot thickens. On the same day, an Obama administration health official, Gary Cohen, announced that the federal government (taxpayers) will offset most losses, citing section 1342. Sweetening what the law already guarantees, he pledged to “modify” the bailout’s “final rules to provide additional assistance.”
That’s when Congress finally did its job and read section 1342. Senator Marco Rubio (R. Florida) called it a “dirty little secret” and offered legislation to repeal it. House Republicans held a hearing at which Secretary of Health and Human Services Kathleen Sebelius confessed that the administration had never tried to estimate what the guarantee could cost taxpayers. Ah, how freely government bureaucrats spend other people’s money.
Thursday’s downgrade underscores the likelihood that taxpayers will be socked with bailout costs of unknown proportions unless section 1342 is repealed.
That’s just one reason for repeal. Another is that Section 1342’s purpose is to bamboozle the public and hide Obamacare’s inevitable failure until health “reform” is entrenched beyond turning back.
Inevitable, because anyone with knowledge of health insurance knew from the start that Obamacare’s exchanges could not offer affordable insurance. The premiums have to cover a long list of mandatory benefits and as well as $100 billion in taxes that the law imposes on insurers over the decade. Most significantly, the premiums have to cover the cost of caring for seriously ill people at the same price as the healthy pay. Every state that tried this community rating scheme (including New York) has seen premiums soar, and healthy people stop buying insurance. It’s called the “death spiral.” All these factors make “affordable” an impossible goal under Obamacare’s rules. That’s what the bailout provision is designed to conceal through 2016.
As the Society of Actuaries explains, the bailout was designed to incentivize insurers to set premiums too low. It's guaranteed to make Obamacare look affordable. That’s beneficial for politicians tied to Obamacare and helpful to insurers who want market share. Of course, since insurers choosing not to participate in the exchanges can’t get bailouts and don’t get subsidies for their customers, you won’t have the option of buying from them for long.
Think about it. If the federal government gave out subsidies to buy only Ford cars and told Ford Motor Company not to worry about pricing the car, because taxpayers will make up Ford’s losses, how long do you think Chrysler and Toyota could compete?
Moody’s also cautioned that its downgrade was due largely to the “ongoing unstable and evolving environment,” as the Obama administration repeatedly revises the Affordable Care Act, decreeing “new regulations and announcements that impose operational changes well after product and pricing decisions were finalized.”
As any business owner will tell you, a temporary bailout is no substitute for the rule of law. The bailout keeps Obamacare on life support, at taxpayers’ expense, while the free market expires and the rule of law disappears. That is the real state of the union.
The taxpayers lose with this bunch of yoyos no matter what, so we should be demanding a stop to our taxpayer dollars being wasted, and forget the politicians who aren’t doing anything to stop this. Is anyone suing Obamacare for the security breaches? Thirty one felons in CA are now Navigators for Obama Care...how absurd.
Obama never tires of using other people’s money to further his own ambitious agenda. The SOTU address was dripping with having other people pay for things that he wants credit for.
And THIS, my friends, is what McConnell, Boehner, and Paul Ryan agreed to when they signed the budget surrender.
So, here's the GOP 2014 election strategy:
First, a large majority of GOP Congressmen vote to fully fund ObamaCare for two years, including bailouts.
Second, we ask voters to reelect GOP Congressmen, because ObamaCare is really, really bad, and someone must stop it!
Bookmark.
So you are correct but barring another (partial) government closure, which is like the equivalent of touching that political third rail thanks to how it is portrayed in the media and how many people feel about it, what option do they have left until after the November elections.
This reminds me of the British in World War II. If they had stayed in France and kept fighting they would have lost all of their assets. Instead, they decided to leave France and then come back in 1944 a lot more stronger and with a lot more big friends to beat the hell out of the Germans.
Maybe I am wrong but I just don’t see any other political option.
Sure glad the CBO took all that into account. /s
You got that right.
When he went to jail, investigators found Ponzi King Bernie Madoff had stashed billions offshore---into a labyrinth of secret financial entities.
COLLUSION AND CONSPIRACIES GALORE Some $8.9 billion was funneled to Madoff through a dozen so-called feeder funds based in Europe, the Caribbean and Central America......a labyrinth of hedge funds, management companies and service providers that, to unsuspecting outsiders, seemed to compose a formidable system of checks and balances.
But the purpose of this complex architecture was just the opposite: the feeder funds provided different modes for directing money to Madoff in order to avoid scrutiny and generate more fees.
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WIKI.COM Stanley Chais, a philanthropist who invested heavily with Mr. Madoff, and Carl J. Shapiro, one of the money manager's oldest friends, are among at least eight Madoff investors and associates being scrutinized by the U.S. attorney's office in Manhattan. Prosecutors are continuing to probe Madoff family members and employees.
Others include: Frank Avellino, a Florida accountant who ran an investment fund that invested client money; Noel Levine, a real-estate investor who works out of a two-room office on the 17th floor, next door to Madoff's fraudulent investment operation, and Palm Beach investor Robert Jaffe, a son-in-law of Mr. Shapiro who referred potential investors to Madoff. [4]
Madoff Securities International Ltd.----In 2008, about $1 billion was transferred last between Madoff’s U.S. firm and Madoff Securities International Ltd. in London. [5][6] On March 24, 2009 Judge Louis L. Stanton granted power of attorney to Irving Picard, trustee, over Madoff's controlling stake in London.[7]
Authorities in the U.K. are seeking evidence of money laundering involving the London business, Madoff Securities International Ltd., which opened in 1983 as a separate legal entity from Mr. Madoff's U.S. New York office. He allegedly sent more than $250 million beginning as early as 2002, from his New York-based firm, Bernard L. Madoff Investment Securities LLC, to the U.K. office and then back to accounts in the U.S.[5][6]
In 2000, Madoff began to add staff and expand the operation, and loaned the business $62.5 million. He had a staff of 25, including traders, managers and support. Instructions to staff was that they communicate with Madoff Securities through personal e-mail accounts, not through company e-mail.[5]
There were nine directors. Family members with shares included Mark and Andrew Madoff, Peter Madoff, and Bernard himself. Ruth Madoff, Bernard Madoff's wife, also held shares. [8] Non-family members with shares included Maurice J. "Sonny" Cohn. Madoff and Cohn were shareholders in Cohmad Securities, which steered investors to Mr. Madoff's advisory business.
In 1987, Mr. Cohn had shares of Madoff Holdings Ltd., a predecessor to the current London firm. In 1998, Mr. Cohn held 35,624 non-voting shares, some of which he transferred to "BL Madoff" in 1998, and the rest that he "disposed of" in 2004.[8]
Paul Konigsberg, a New York City accountant and a longtime friend for more than 25 years, prepared two Madoff Family Foundation tax returns, and received the non-voting shares, valued at $35,000. He did work for the London office when it was first opened. [8] A general ledger of Madoff accounts listed Konigsberg, of the reputable accounting firm of Konigsberg, Wolf & Co., as receiving $30,000 a month to advise the MSIL operations, and funnel client checks to the London office for Madoff's own use.[9]
Clients were often directed to Mr. Konigsberg by Mr. Madoff and his family. Mr. Konigsberg prepared the tax returns of foundations of six other families, many of which have lost millions, even hundreds of millions, of dollars. He also represented scores of individual Madoff investors.
Mr. Konigsberg's firm has received a civil subpoena from the SEC. His Madoff-related clients included Carl and Ruth Shapiro, Boston philanthropists whose foundation lost $145 million, and whose son-in-law, Robert M. Jaffe, under investigation, is a Madoff business partner.[9][10]
Konigsberg held Madoff accounts under his name including two in the name of the Westlake Foundation. Paul J. and Judith Konigsberg are officers and directors of the foundation. He owns homes in his wife, Judith's name in Greenwich, Connecticut and Palm Beach Gardens, Florida.[11]
On April 20, 2009, Steven Leber filed a $4 million lawsuit against Konigsberg and his accounting firm for negligence, and breach of fiduciary duty.[12] Konigsberg answered the charges with affirmative defenses.[13]
Evidence is being gathered by investigators on a U.S.-U.K. task force that Konigsberg and Levy, a real-estate mogul and philanthropist are believed to be involved in an international transfer of money. Levy is believed to have helped Paul Konigsberg funnel checks to London. And investigators in New York say there were billions of dollars worth of checks going back and forth between Madoff and Levy.[9]
Ruth and Bernie Madoff had an intimate relationship with Levy and his wife, Betty. Madoff was long known to have been Levy's "fixer," obtaining everything from choice restaurant reservations to emergency medical care. Levy had offices one floor below Madoff's in New York’s Lipstick Building. It was Levy who introduced high-profile investors to Madoff.
Jeanne Levy-Church's losses forced her to shut her JEHT Foundation and her parents’ foundation, the Betty and Norman F. Levy Foundation, lost $244 million. JEH helped the less fortunate, especially ex-convicts.[9][10] /////NY POST REPORT--1/22/14---A former operations chief for Bernie Madoff, on trial for aiding the epic Ponzi schemer in his historic fraud, once pulled strings to have his son put on the company payroll despite not working there, a Manhattan jury learned Monday.
Craig Kugel, a former Human Resources staffer at Madoff Securities, testified in Manhattan federal court that the son of Daniel Bonventre was handed a “no show” job so he could collect health benefits after graduating from college.
Kugel, who copped a plea in 2012 to giving salaries and benefits to people who weren’t employees, said Madoff approached him about the idea in 2007. According to Kugel, Madoff said that Bonventre had asked him how his son, Daniel Jr., could stay on the plan. Madoff then called the elder Bonventre a “key employee,” adding “we need to help him out and do something for his son,” recalled Kugel.
This is not the first time that Daniel Bonventre Jr. – who has not be charged with any wrongdoing – has been thrown under the bus by an ex-Madoff staffer seeking a better plea deal with the feds.
When copping a plea in June 2011 to falsifying records, former Madoff payroll manager Eric Lipkin also said the younger Bonventre – along with others – received salaries and benefits from the firm despite not working there. Lipkin claimed he was instructed by Bonventre to give his son the “no show” job.
The elder Bonventre is one of five former key Madoff staffers currently on trial for fraud. Kugel’s father, David, a supervisory trader at Madoff Securities, pleaded guilty to fraud in 2011.
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