Obamacare Insurer Bailouts

Repeal and Replace Obamacare now!

Obamacare Insurer Bailouts: In an effort to win the support of health insurance companies during the debate over Obamacare, three “risk mitigation” provisions, also known as bailouts, were written into the bill to compensate health insurance companies for insuring high-cost consumers. These three bailouts include risk corridors, reinsurance, and cost-sharing subsidies.

The reinsurance provision, in particular, is the subject of the latest controversy surrounding Obamacare. As written, the reinsurance provision requires the U.S. Department of Health and Human Services (HHS) to collect, from 2014-16, $25 billion in “assessments” or taxes on employer-provided health-insurance plans and:

1.)    Reimburse the U.S. Treasury, i.e. taxpayers $5 billion for operating costs and then

2.)    Bail out health insurance companies. These assessments should be repealed along with the rest of Obamacare, but so long as they are current law, the resulting revenue should not be used to bail out insurance companies.

Instead of following the law, HHS illegally prioritized health insurance companies over taxpayers. This year, health insurance companies are set to receive $15.7 billion in bailouts while taxpayers will only receive $500 million of the $4 billion they are currently owed. Even the Congressional Research Service (CRS) acknowledges this action as a clear violation of law.

In an effort to stop the HHS from continuing to break the law, Senator Ben Sasse (R-NE) and Representative Mark Walker (R-NC) introduced the Taxpayers Before Insurers Act (S. 2803 and H.R. 5904). If passed, this bill would “penalize HHS for illegally prioritizing big insurance companies ahead of taxpayers through the Affordable Care Act’s reinsurance program” by cutting “50 percent of HHS’s general department management fund unless the Secretary of HHS pays the full amount taxpayers are owed.

Obamacare has increased insurance premiums, raised taxes, restricted choice, and made hardworking Americans lose their doctors and health care plans, yet the Obama administration is dedicated to bailing out insurance companies. Obamacare must be fully repealed, but in the meantime, Congress should shut down the current avenues to bail out the insurance companies.