A new study confirms one of the worst fears about Obamacare -- that taxpayers likely will be forced to bail out health insurance companies that are losing money in the president's signature health-care scheme.
As expected, insurers pressured by the administration to set premiums artificially low are bleeding red because the Affordable Care Act has
attracted too many old and sick people and not enough young and healthy people.
And provisions in the law protecting companies from losses will shift the burden to The Government's Favorite ATM.
"Taxpayers are on the hook to bail out health insurers," said
Turns out the nebulous ACA law -- the one
The other two -- reinsurance and risk corridors -- involve your wallet.
Reinsurance protects insurers that enroll unexpectedly sick people; taxpayers' costs are limited to
In other words, taxpayers easily could be forced to cover billions in losses if the balance of risk in the health exchange system goes out of whack and the pool of cash from profitable insurers is exhausted.
Republicans raised the red flag in November when U.S. Sen.
Then in April, memos revealed that top
Their pleas to Jarrett worked, apparently. The following month,
It doesn't take a genius to figure out what the "other sources of funding" are.
It's yet another page from the Obama central-planning playbook -- achieve political gains by picking marketplace winners and losers; reduce competition; and burden taxpayers with the fallout.
How cynical that the health insurers that Democrats once demonized -- then-House Speaker
"Right now, health insurers are pricing their offerings for Obamacare's second year based on the Obama administration's assurances that taxpayers will prevent them from losing money," the study author Graham said. "Removing this guarantee is necessary to ensure that health insurers bear all the business risk of participating in Obamacare."
Obamacare defenders -- yes, some are still holding out hope -- debate whether the risk corridor provisions are, in fact, a "bailout," because taxpayers technically wouldn't be saving insurance companies from bankruptcy. Others point out that the Bush administration structured similar provisions in the
First, as to the definition of a bailout: If the point of the risk corridor provision is to rescue insurers from financial losses incurred by participating in the exchanges, then yes, a "bailout" is exactly what it is.
As for the "Bush did it, too" excuse, there is no comparing the successful
If only the same could be said for Obamacare. It will achieve "revenue neutrality" by using taxpayer funds to offset insurer losses.
The majority of Americans never asked for Obamacare. Now that they have it, the majority of them don't like it, based on the latest opinion polls.
No poll has asked Americans if they think it's their job to bail out insurance companies that lose money under Obamacare, but maybe one should. Because without some sort of intervention, that's exactly what may happen.
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