Congressional Republicans keep saying they oppose Obamacare. Yet they’re refusing to take the simplest and easiest action against it.
The way the law is designed, insurance companies get taxpayer subsidies if they incur big losses on the exchanges. That guarantee has encouraged them to participate in the exchanges. It has also enabled them to charge lower premiums, since they do not have to cover their risks.
Republicans could force supporters of Obamacare to defend these taxpayer subsidies by advancing legislation to stop them, as Senator Marco Rubio (R., Fla.) and Representative Tim Griffin (R., Ark.) have proposed. But their colleagues are balking.
In part, that’s because of disagreement about how to proceed. The “risk corridors” that protect insurers from big losses have two potential funding sources: tax payments from other insurers, and general tax revenue. The question is whether to abolish the risk corridors altogether or end the ability to tap general revenues. Our preference is to do the latter. It’s fine for participating insurers to pool their risks, but taxpayers should not have any exposure for their aggregate losses.
Other reasons for inaction are less credible. Some Republicans say that the insurance companies should not be penalized for the defects of the law. Why not? They have freely chosen to participate in the exchanges, and they should bear the risks of that decision — which include the risk that Congress might decide not to shovel tax dollars at them. The alternative, after all, is to punish taxpayers.
The balkers also raise the worry that Democrats would accuse them of trying to cause premiums to increase. But to say that ending taxpayer exposure to insurers’ losses would increase premiums is to say that Obamacare works by putting taxpayers on the hook. Making taxpayers guarantee insurance companies’ bottom lines is not the way the health-care system should work—and it seems hard to believe Democrats will really want to defend that model.
Anyway, Democrats have made this sort of charge before. Republicans have repeatedly tried to weaken the individual mandate, which would also have the effect of raising premiums. Yet that attack has not hurt Republicans, because the mandate itself is so unpopular. The same is probably true of taxpayer subsidies for insurers.
The debate over the Export-Import Bank is one test of Republican sincerity about ending corporate welfare. These taxpayer subsidies are another: If Republicans can’t take on corporate welfare when doing so advances one of their party’s most popular and basic commitments, when will they? And if Republicans aren’t willing to break with the insurers over this issue, then in what sense do they oppose Obamacare?