HHS: Bailing out Obamacare insurers an 'obligation' of the federal government

Washtington Examiner ^ | 20 Nov 15 | Philip Klein

[SkyPilot]

The Department of Health and Human Services attempted to reassure private insurers on Thursday that they'll be able to recover losses from participating in Obamacare by claiming it was an "obligation" of the U.S. government to bail them out.

At issue is a provision within the law known as the risk corridors program. Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims. The idea was to provide training wheels to insurers in the first years of Obamacare's implementation, and to take away any incentive for insurers to cherry pick only the healthiest customers.

Republicans, fearing that this could turn into an open-ended government bailout in the event of industry-wide losses, included a provision in last year's spending bill that limited the program, requiring HHS to pay out only from the pool of money collected, rather than supplementing it with other sources of government funding. President Obama signed that bill.

Now that insurers have been able to look at medical claims, what they've found is that enrollees in Obamacare are disproportionately sicker, and losses are piling up. For the 2014 benefit year, insurers losing more than expected asked for $2.87 billion in government payments through the risk corridors program, but HHS only collected $362 million from insurers performing better than expected. Thus, the funds available to the federal government only amounts to 12.6 percent of what insurers argue that they're owed. So insurers are not happy.

[SkyPilot]

And now the industry lobbying group America's Health Insurance Plans — which happens to be helmed by Marilyn Tavenner, who previously oversaw the implementation of Obamacare as head of the Centers for Medicare and Medicaid Services — is aggressively fighting for more money.

The insurers backed ObamaCare!! So did AARP.

The CEOs of the largest for-profit health insurance corporations stood to gain huge financial windfalls from a law that would require Americans to buy coverage from them. Wall Street made Billions on this whole scam.

And now, when they "discover" that ObamaCare's "enrollees" are deadbeats and abusers of the healthcare system, they want a "bailout."

[scooby321]

It was going to bend the cost curve back and save the deficit?

[dila813]

I notice the government calls it an obligation which they think delaying payment more than a year is no big deal.

With this uncertainty, I wonder if the health insurers are claiming this as an Accts Receivable.

If so, they are all opening themselves up to share holder lawsuits and criminal penalties of fraud. The CEOs of these companies may be going to jail for 10 years, thanks to Obama.

[FlingWingFlyer]

Then let the politicians and government employees in the “federal government” bail their Obamacare scam out with their own money. Stop wasting taxpayer dollars on freeloaders!

[proxy_user]

Of course, Congress could modify the law to fix the problem. I’m sure they’ll be happy to help Obama.

[Rockingham]

This is where we have Obama over a barrel. The GOP should require Obama and the Democrats to agree to offsetting permanent domestic spending cuts in return for one year of extra Obamacare cash. Begin with zeroing out funding for Planned Parenthood and Americorps, then move on to other cherished Democratic programs.

[DJ MacWoW]

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[randita]

I wish writers/reporters would replace the word “federal government” with “taxpayers”.

It’s as if the “federal government” has some kind of money tree and we have nothing to do with it.

So just like the bank bailouts, we again have companies that are too big to fail that taxpayers have to prop up.

[InterceptPoint]

This is simply shocking. Who could have possibly anticipated that the losses would be this high and the program would not be self sustaining?

ANSWER: 100% of the Freepers who paid even the slightest bit of attention to this piece of Obama Garbage when it was being developed, passed by Congress and implemented.

[SkyPilot]

Lol.

[Mr. Jeeves]

The insurers backed ObamaCare!!

It kept their revenue streams intact over the last few years - which is extremely long-term thinking by the standards of today's executive management teams.

Now, they need to come up with the next scam. They'll call up a few of the Senators they own and have them get right on it. :)

[jsanders2001]

Paid protesters. Everything about this “transparent” administration is smoke and mirrors....

[Alberta's Child]

The Department of Health and Human Services attempted to reassure private insurers on Thursday that they'll be able to recover losses from participating in Obamacare by claiming it was an "obligation" of the U.S. government to bail them out.

Then let the Department of Health and Human Services bail out these insurance companies out of its own operating budget. The agency will last about 18 months before it closes down after laying off all its employees.

[raybbr]

It’s as if the “federal government” has some kind of money tree and we have nothing to do with it.

We don't as far as most politicians and govt workers are concerned. I tell my sons that pols and govt workers work from the premise that all monies, do in fact, belong to the govt and they graciously allow us to keep some.

I really believe they think this way. Just talk to any fireman or cop or any other govt worker. Getting paid by the govt has become an entitlement.

[tanknetter]

Whoa. People should reread that third paragraph in the excerpt.

The GOP Congress managed to successfully sneak a poison pill into Obamacare last year.

[Rock N Jones]

Send the bill to John Roberts

Congress passed the Affordable Care Act to improve health insurance markets, not destroy them

[theBuckwheat]

The failure mechanism of the free market is essential to the maintain the optimum use of finite capital. Recall how fervently the left scolds us about “sustainability”. Yet, as we see in this case, very few leftist schemes are ever economically sustainable.

Leftists would also scold us about “ecosystems”, and always praise nature as the perfect example of how a “sustainable” system operates. What is the example here? It is like an old-growth forest where one of the giant oaks can no longer keep functioning. It dies and soon decay sets in. In a few years a strong wind topples it. As it lays on the ground, a vast new army of bacteria, microbes and insects set upon its giant corpse, reclaiming its chemical assets and converting them into new life for other organisms. It is upon these reclaimed chemical assets that new trees compete to replace the giant that died.

This is also how the free market works. It was best observed and documented by economist Joseph Schumpeter who coined the phrase “creative destruction”. The forest is “sustainable” when trees that no longer can make efficient use of the resources die and have those asset reclaimed by others who use them more efficient use of them. A very similar mechanism keeps the economy healthy and growing.

We do want the economy to grow don’t we?

Now where government can destroy economic sustainability is where it provides money to failing enterprises. When failure is forbidden, success becomes far more difficult.

This is doubly true when government subsidizes failing corporations by creating money out of thin air, mainly via creation of debt that it forces the market to accept.

One of the roots of our ailing economy at this very moment is the vast quantity of money that government is creating out of thin air. Near-infinite money buys near-infinite government. It used to be that the main limit on the size and power of the federal government was that taxpayers would only send so much of their incomes to Washington. Now that government has given itself the power to create all the money it needs, this limit is moot.

When the states call an Article V convention to consider amendments to the Constitution, the first order of business must be to devise ways to limit the amount of money the government can spend. This is a more important limit than limits on taxes or limits on borrowing. We cannot have a healthy and growing economy until we can stop it from thwarting the very mechanism that ensure our economy is sustainable.

[Maurice Tift]

   Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims.

  From each according to his ability, to each according to his need - it's so brilliant!! (no - not really)

[norwaypinesavage]

There is a simple difference between capitalism and socialism. With capitalism, successful businesses are rewarded, sometimes richly, for their successes, and are destroyed for their failures. With socialism, profits are awarded regardless of the successes or failures of business decisions.

Though somewhat tattered and torn, the business model for the government of the US is still capitalism. It's time for the companies that hitched their wagons to the socialist horses of Obamacare to follow them into the abyss.

[DH]

Remember the golden rule of government on all levels....”Once mentioned it will become law sooner or later.”

This statement is 100% sure to happen. Check out liberal history.