A new taxpayer bailout to cover up ObamaCare’s failure?
How dare the Obama administration bail out insurance companies with our money in order to hide ObamaCare’s failures. Thursday, just hours after giant insurer UnitedHealthcare said it’s losing money selling ObamaCare plans and will likely exit the health exchanges next year, the Obama administration quietly promised to bail out insurers for their losses — using your money.
Nearly all insurers are bleeding red ink trying to sell the unworkable plans. Without a bailout, more insurers will abandon ObamaCare, pushing it closer to its demise. A bailout would benefit insurers and the Democratic Party, which is desperate to cover up the health law’s failure. Ironically Democrats (including Hillary Clinton and Bernie Sanders) bad-mouth bank bailouts but are all for insurance-company bailouts. Truth is, it’s a ripoff for taxpayers, who shouldn’t have to pay for this sleazy coverup.
The pressure is building on Republicans in Congress. Industry groups like the American Health Insurance Plans and giant insurers are joining with the Obama folks to lobby ferociously for a bailout.
UnitedHealthcare’s Thursday bombshell rattled investors, health-plan subscribers and ObamaCare partisans. The insurer currently covers more than half a million ObamaCare plan subscribers in 23 states, including New York, New Jersey and Connecticut.
The insurer announced losses of $425 million on ObamaCare plans, and CEO Stephen Hemsley said, “We cannot sustain these losses,” and “we saw no indication of anything actually improving.”
Hemsley pointed to enrollees who were older and sicker than expected and in many cases gamed the system by waiting until they were ill to sign up. “We can’t subsidize a market that doesn’t at this point appear to be sustaining itself.”
When UnitedHealthcare speaks, the industry listens. It’s the nation’s largest insurer. And the problems it faces are slamming all insurers.
According to the consulting firm McKinsey, insurers lost billions selling ObamaCare plans in 2014, and the losses are mounting again this year. On Friday, Aetna also conceded it is losing money on ObamaCare.
Similar pressures already have forced a dozen insurance ObamaCare co-ops out of business, including the New York giant insurer Health Republic. If enrollments continue to stagnate, it’s likely other insurers will follow UnitedHealthcare and jump ship.
On Thursday, the administration tried to calm insurers, sending them a written memo full of promises. Obama’s Department of Health and Human Services vowed to go to Congress for full funding to reimburse insurers for their losses.
At issue is the Affordable Care Act’s so-called “risk corridor” program. Profitable insurers are supposed to pay into a fund every year to help unprofitable insurers. But with nearly all insurers losing money on ObamaCare, there’s not enough money in the pot. Insurers requested $2.9 billion to offset their 2014 losses, and were told they would get only 13 cents on the dollar, because the pot is so empty.
That shortfall pushed several co-ops into bankruptcy, including Health Republic. UnitedHealthcare also said it was a reason for its reluctance to stay in ObamaCare. But too bad for insurers. They’re in business to take risks and either make money or lose it.
The risk-corridor program shouldn’t be used to funnel taxpayer money to insurers. But the administration is trying to weasel around it and get Congress to fill the pot with taxpayer dollars. That’s what makes it a bailout. And crony capitalism.
When Obama tried this last year, Republicans in Congress stopped it. In the coming weeks, count on Obama and congressional Democrats to try slipping insurance-bailout money into the spending bills being rushed through Congress as the year closes.
Let’s face it, Obama will do anything to protect his signature health-care law, even if it means paralyzing the budget process. As long as Republicans keep their backbone and their eyes on the fine print, they can stop the bailout again. Taxpayers shouldn’t have to prop up the failures of ObamaCare.
Betsy McCaughey is the author of “Beating Obamacare.”