Taxpayers Get Fleeced to Make Obamacare Look Affordable Townhall.com ^ | January 30, 2014 | Betsy McCaughey / FR Posted by Kaslin
EDITED Moody’s lowered the outlook for health insurers from stable to negative, blaming Obamacare.....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.”
(Despite then Speaker Nancy Pelosi's sap-happy talk to Democrats that "we have to pass it to see what's in it"), 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the likelihood that taxpayers will be socked with bailout costs of unknown proportions unless section 1342 is repealed.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 (lock-stepping Democrats who voted straight party-line) 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.
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.” 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.
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CAN YOU SAY GOVT FRAUD? Where's all the untraceable O/Care zillions going? Zillions from fees, enrollments, fines, web-site contracts, state exchange set-ups, and so on. The organized Chicagoland criminals in the WH make Madoff look like a piker.And when he was finally put away, investigators found Ponzi King Madoff had stashed billions offshore---into a labyrinth of secret financial entities. Can you say tax evasion and money laundering?
SIGNING "THE BIG EFFIN' DEAL" (now known as "The Big Effin' Debacle")
"Those Democrats leering over my shoulder owe me bigtime. This
healthcare bill insures we have a permanent Democratic majority."
" All except those Tea Party types, swallowed hook, line and sinker my promises that they could:
(1) keep their existing health plans,
(2) keep their own doctors that they like,
(3) keep their 25-year-olds on the family health plan,
(4) never be denied coverage for a pre-existing condition,
(5) sign up instantly on my tech-savvy government Web site,
(6) buy insurance only after becoming seriously ill."
(7) save $2,500 in annual premiums in the bargain....
(8) All without any new taxes."
"Them sonovagun Tea Partiers will rue the day they criticized my wonderful bill."