ObamaCare’s Closed-Door Bailout Could Cost Taxpayers Billions

That didn’t take long.

When America’s largest insurance provider, UnitedHealth Group, announced disastrous losses due to ObamaCare and started talking about exiting the program last week, I wondered if they, along with other companies grumbling about ObamaCare red ink, might be looking for a bailout.

“Maybe UnitedHealth is floating this story because they want to rattle the government’s cage, threatening a blockbuster walkout unless some mixture of taxpayer loot and regulatory benevolence is offered to keep them on board,” I mused, with an eye toward the Democrat Party’s aversion to ObamaCare meltdown headlines during the 2016 election cycle.

Lo and behold, the very next day brought a story from Betsy McCaughey at the New York Post entitled, “A New Taxpayer Bailout to Cover Up ObamaCare’s Failure?”

McCaughey was beside herself at the Administration quietly floating a taxpayer bailout scheme mere hours after UnitedHealth’s announcement, which she described as a “bombshell” that “rattled investors, health-plan subscribers, and ObamaCare partisans.”

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.

McCaughey noted that Obama’s previous bailout scheme was thwarted by congressional Republicans last year – an achievement which Senator Marco Rubio is particularly proud of.

His presidential campaign has been circulating a collection of headlines crediting him with delivering the death blow to ObamaCare by choking off the risk-corridor pipeline into taxpayer wallets. It might be the only good thing to come out of the infamous 2014 “Cromnibus” spending-bill nightmare. Cynics might say it’s one of the few good things to come out of the Republican Congress.

In essence, Rubio’s move stopped the ObamaCare commissars from giving insurance companies more risk-corridor money than those wealthy corporations had collectively provided for themselves. The figure commonly cited for the resulting fiscal train wreck is that insurance companies recovered about 13 cents on every dollar they lost.

As one of those stories at The Hill observes, Rubio couldn’t manage to kill the risk corridors entirely, but he made it much harder for the Administration to use them as piggy banks for its insurance-industry cronies, and Rubio has been talking about further action on the campaign trail.

“So far, we’ve succeeded in stopping the Obama administration from bailing out healthcare companies under ObamaCare, and it’s critical that Congress once again stand with taxpayers to stop any taxpayer bailout of health insurers from happening,” Rubio wrote to Republican congressional leaders on Tuesday, urging the preservation of his policy rider that prevents the Department of Health and Human Services from tapping into general appropriations or Medicare funding for ObamaCare cash.

His call was backed by conservative groups like Americans for Tax Reform and Heritage Action for America, which estimated that Rubio’s measures have blocked up to $2.5 billion in bailout money.

Tim Carney at the Washington Examiner sees ObamaCare insiders – “the wealthy and powerful operatives who alternate between top government jobs and top industry jobs” – hustling to “find more bailout money for insurers.” If Congress won’t play along, the Administration will find ways to go around it:

[The Centers for Medicare & Medicaid Services] announced last week that the government was going to find a way to pay the insurers their full bailout, anyway. “The remaining 2014 risk corridors payments will be made from 2015 risk corridors collections, and if necessary, 2016 collections.”

What if excess losses in those years again surpass excess profits? CMS said it “will explore other sources of funding for risk corridors payments….” CMS also declared the unfunded portion of Obamacare’s initial promised insurer bailout was nevertheless an “obligation of the United States Government for which full payment is required,” even though at least under the current appropriation law it is illegal.

That’s where those hustlers and powerful insiders come in. Did you know the acting administrator for CMS, Andy Slavitt, used to be an executive at United Healthcare, but was given a special waiver from the Administration’s ethics rules by the President? Did you know the top insurance-industry lobbyist for more bailout money is… his predecessor as CMS head, and a key player in the unholy disaster of the HealthCareDotGov launch, Marilyn Tavenner?

“In summary: Tavenner helped build the risk corridor program, and then went to the industry that would get the money. Slavitt left the insurer with the biggest losses, and now is the government official promising to bail out his former employer,” Carney writes.

Golly, I wonder if the Administration’s current and former ObamaCare officials will be able to team up and secure the billions of dollars needed to keep their boss’ signature “achievement” from collapsing into one of the biggest fiscal disasters in American history, destroying the fortunes of his top cronies along the way? The suspense is killing me.

The surprise ending to this sordid tale is that Obama and his donors might not have to go around Congress to get the money they want.

On Wednesday, the TaxAnalysts website posted this report about a $700 billion tax extender deal for this year’s embarrassing pork-laden omnibus spending bill, worked out by Democrat Chuck Schumer of the Senate Finance Committee and the former chair of House Ways and Means, current Speaker Paul Ryan:

According to tax lobbyists and House staffers, the tentative deal now under consideration is being developed by all congressional leaders and the White House. The extenders are likely to be attached to the omnibus budget legislation expected to pass Congress by December 11.

The plan under consideration would also delay the medical device tax in exchange for additional funding for ACA risk corridors, which is a program that allows federal payments to insurers to offset high losses in the initial years of the ACA.

The cronies are going to get that bailout, one way or the other.

Just add it to the billions wasted on President Obama’s disastrous health care scheme, along with the exorbitant cost of the craptacular website, jacked-up insurance premiums, mind-boggling out-of-pocket expenses… and, of course, the lavish bureaucratic overhead required to make all this Big Government magic happen.