Obamacare has been a train of failed promises. More than six million Americans saw their insurance policy canceled, and millions more will follow once the employer mandate takes effect. Obamacare has increased premiums by an average of 49 percent in 3,137 of America’s 3,144 counties, and costs are projected to continue to rise. The cost of the law is projected to be $2.6 trillion over the next ten years and, judging by the CBO’s past estimates, that number will probably increase.
Meanwhile, many have been warning of the inevitable insurance company bailouts as a result of a failing Obamacare health care law. Now, it appears that bailout is becoming a reality, without Congressional approval, to the tune of $1 trillion over the next ten years.
CEOs of various insurance companies met with White House officials last October. E-mails show that the executives were gushing at the outcome of that meeting, and now we know why. The Obama administration has set up a slush fund to funnel billions of dollars to insurance companies every year. This year the total will amount to about $17 billion. By 2018, the fund will pay out about $100 billion in taxpayer money to various insurance companies on a yearly basis.
The Weekly Standard has more:
Robert Laszewski—a prominent consultant to health insurance companies—recently wrote in a remarkably candid blog post that, while Obamacare is almost certain to cause insurance costs to skyrocket even higher than it already has, “insurers won’t be losing a lot of sleep over it.” How can this be? Because insurance companies won’t bear the cost of their own losses—at least not more than about a quarter of them.
The other three-quarters will be borne by American taxpayers.
For some reason, President Obama hasn’t talked about this particular feature of his signature legislation. Indeed, it’s bad enough that Obamacare is projected by the Congressional Budget Office to funnel $1,071,000,000,000.00 (that’s $1.071 trillion) over the next decade (2014 to 2023) from American taxpayers, through Washington, to health insurance companies.
As Laszewski explains, Obamacare contains a “Reinsurance Program that caps big claim costs for insurers (individual plans only).” He writes that “in 2014, 80% of individual costs between $45,000 and $250,000 are paid by the government [read: by taxpayers], for example.”
In other words, insurance purchased through Obamacare’s government-run exchanges isn’t even full-fledged private insurance; rather, it’s a sort of private-public hybrid. Private insurance companies pay for costs below $45,000, then taxpayers generously pick up the tab—a tab that their president hasn’t ever bothered to tell them he has opened up on their behalf—for four-fifths of the next $200,000-plus worth of costs. In this way, and so many others, Obamacare takes a major step toward the government monopoly over American medicine (“single payer”) that liberals drool about in their sleep.
Laszewski adds, “The reinsurance program has done and will continue to do what it was intended to do; help attract and keep more carriers in Obamacare than might have otherwise come.” Thus, Obamacare is being aided by having taxpayers subsidize big insurance companies’ business expenses. (Who could ever have guessed that big government and big business might be natural allies?)
But, amazingly, it doesn’t stop there. Laszewski writes that Obamacare also contains a “Risk Corridor Program that limits overall losses for insurers.” So insurers not only don’t have to pay out all of their costs; they also don’t have to swallow all of their losses.
While publicly excoriating “the one percent,” President Obama is in bed with the big business cronies. What’s more is that he is violating his own law without the approval of Congress. This is big government corporate welfare at its worst.
The Obamacare bailouts are already here, and you’re footing the bill.