Exclusive–Rubio: Prevent Blank Check Bailouts Under Obamacare
It's become a hallmark of Barack Obama's presidency that mistakes made by policy makers, businesses, and governments at all levels must be paid for by American taxpayers.
This perverse bailout culture is again evident in ObamaCare, which we now know contains a little-known provision that grants the administration a blank check for a taxpayer-funded bailout of insurance companies when ObamaCare fails.
When President Obama recently announced his unilateral order to allow health insurers to ignore ObamaCare's mandates and regulations and keep offering health plans that people wanted to keep, it exposed another fundamental problem in the law which puts American taxpayers on the hook.
Buried deep within ObamaCare's approximately 1,000 pages was section 1342, which authorized what are known as risk corridors that limit the amount of profit insurers could extract from the program while also limiting their losses. While risk corridors can be structured in budget-neutral ways that protect taxpayers, ObamaCare did no such thing.
After the law was signed, thousands of more pages of regulations, administrative interpretations, and executive actions included further clarity on how this administration would implement this provision.
The day the president announced his temporary "keep your plan fix," he unsurprisingly left this important background detail out of his speech, leaving it to his Department of Health and Human Services to acknowledge in the fine print of a press release: “Though this transitional policy was not anticipated by health insurance issuers when setting rates for 2014, the risk corridor program should help ameliorate unanticipated changes in premium revenue. We intend to explore ways to modify the risk corridor program final rules to provide additional assistance.”
A final rule handed down in March of this year by HHS and the Centers for Medicare & Medicaid Services states, “Regardless of the balance of payments and receipts, HHS will remit payments as required under section 1342 of the Affordable Care Act.”
And on November 14, the American Academy of Actuaries released a statement saying that President Obama’s plan to reverse health insurance cancellations “could lead to negative consequences for consumers, health insurers, and the federal government." They added, "Costs to the federal government could increase as higher-than-expected average medical claims are more likely to trigger risk corridor payments.”
In other words, President Obama's November 14 decree can only be implemented if the American taxpayer provides a bailout safety provision funded on their dime.
When I ran for the U.S. Senate in 2010, I ran against ObamaCare, as well as the big government culture that makes taxpayer bailouts a way of life and exposes Americans to paying for the mistakes of politicians and Washington's hand-picked winners. Now, these two principles are coinciding as we have a chance and a responsibility to protect taxpayers from having to pay for an ObamaCare bailout.
I recently introduced legislation that would completely eliminate ObamaCare's risk corridor provision. My one-page bill would instantly wipe away the taxpayer's exposure to millions—and potentially billions—of dollars' worth of a bailout for insurance companies.
If ObamaCare can't survive without this bailout provision—whereby Washington picks insurers as winners and taxpayers as losers—it is more evidence of why it should be repealed.
Since entering the Senate in 2011, I have worked with my like-minded colleagues to protect Americans from ObamaCare's damage—as patients, taxpayers, consumers, and workers. While some measure of relief and protection is possible in the short term, it's becoming increasingly clear ObamaCare's full-scale damage can't be prevented forever, unless the law is repealed and replaced with conservative reforms that will make health care more affordable and accessible for all Americans.
In the meantime, Congress needs to completely protect taxpayers from an ObamaCare bailout by wiping away this possibility from the law.