Obamacare now boasts one wobbly website, a nearly 300 percent cost overrun, and 6,286,357 canceled health plans as of Monday, the Fox News research department reports. What on Earth could make Obamacare even more odious? How about a multibillion-dollar taxpayer-funded bailout of the medical-insurance industry?
Bailout? That’s so 2008–09.
After just two weeks of Obamacare’s full operations, the latest syringe to drop is a potential cash injection to such beloved companies as Kaiser, Cigna, and Humana. That’s right. The same corporations that Obama excoriated last fall as “bad-apple insurers” now stand to collect an eleven-digit payout, thanks to Obama’s signature entitlement.
What must Obama do to unlock this treasure chest and redistribute these gold doubloons?
This corporate-welfare bonanza is buried in the 2,801-page (un)Affordable Care Act that a Democratic Congress largely failed to read before adoption. Section 1341 establishes federal reinsurance to defray the cost of covering consumers who endure some 50 to 100 different high-risk ailments. Under Section 1342’s “risk corridor” provision, an individual or small-group insurer establishes a benchmark for possible financial losses. Taxpayers cover half of such shortfalls between 103 and 108 percent of that target. Above 108 percent, taxpayers absorb four-fifths of those losses. Both high-level handouts would run from 2014 through 2016.
Cost? According to a March 2012 estimate from the federal Center for Consumer Information and Insurance Oversight, cited by conservative activists at FreedomWorks, the reinsurance and “risk corridor” initiatives could cost some $47 billion, at $25 billion and $22 billion, respectively.
Why all this bailout talk?
In order to work economically, Obamacare needs some 7 million people to join, and 2.7 million of them need to be between 18 and 34. Monday’s enrollment figures included only 489,640 of these “young invincibles” — just 18 percent of this coveted goal — and we already are more than halfway to the March 31 sign-up deadline.
The notorious death spiral has started to spin. If the supply of healthy young adults remains insufficient to subsidize older, sicker beneficiaries, Obamacare will vanish down this whirlpool.
Thus, the cash infusion for health insurers.
But the notion that medical carriers deserve even a dime from the Treasury is landfill-grade garbage.
If nothing else, insurers can calculate risk. With their squadrons of actuaries, the health insurers should have forecast the odds that “young invincibles” might avoid Obamacare. If the insurers botched these projections, that’s their problem, not the taxpayers’.
Unlike the coal industry, against which Obama publicly has unleashed blunt-instrument trauma, health insurers cheered as Obama commandeered one-seventh of the U.S. economy. If they now think Obamacare threatens their profits, too bad. They should have spoken up before Democrats enacted Obamacare. Their opposition might have killed the bill.
Taxpayers are exhausted after bailing out AIG, Fannie Mae, General Motors, and other companies that enjoy capitalism on the way up and demand socialism on the way down.
“The American people are sick of Washington picking winners and losers, especially since the chosen losers often end up being taxpayers who foot the bills for Washington’s mistakes,” Senator Marco Rubio (R., Fla.) has stated. Rubio and Representative Tim Griffin (R., Ark.) hope to torpedo this outrage. They should attach their anti-bailout amendment to must-pass debt-ceiling legislation, as columnist Charles Krauthammer counsels.
More urgently, why not use Rubio-Griffin’s savings to underwrite extended jobless benefits? Make Democrats choose: Billions for health-insurance companies or billions for Americans still unemployed, through no fault of their own?
Health insurers will squeal, and conservatives may warm to their siren song. After all, these are private corporations, often denounced by anti-business liberals.
But the health-insurance companies lustily hopped into bed with Obama as he and a Democratic Congress rammed Obamacare down America’s collective throat. Now that their first-semester fling with Obama has cooled, the insurers realize that they got knocked up. And they expect taxpayers to drive them to Planned Parenthood and pick up the tab?
In fact, hell no!
— Deroy Murdock is a Manhattan-based Fox News contributor and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.