On Friday, The Daily Signal posted an article about the payments that were supposed to bail out insurance companies for their losses under ObamaCare. When the health insurance companies initially balked at the provisions of ObamaCare, President Obama sweetened the pot by demanding that everyone have insurance, providing subsidies to make insurance affordable and expanding Medicaid.
The article explains:
The law also created two back-end bailout programs designed specifically to benefit insurers selling Obamacare plans in the individual market. Goody No. 1 was a reinsurance program that reimburses Obamacare plans for most of the expenses run up by people with high annual claims. Funded by a tax on everyone with non-Obamacare coverage, the reinsurance program shoveled nearly $8 billion to Obamacare insurers last year.
The second bailout provision was a “risk corridor” program designed to collect payments from insurers who made excess profits—as determined by the federal government—and make payments to insurers with excess losses. If the government didn’t collect enough from profitable insurers to cover the compensatory payments, taxpayers would be stuck with covering the “shortfall.”
The design amounted to a double bailout, with taxpayers on the hook for subsidizing insurance company losses on the back end as well as for the front-end subsidies and mandates that benefited insurers.
Jeff Sessions, R-Ala, led the effort to block the subsidies to insurance companies.
The article further reports:
In January, Sessions’ committee and the House Energy and Commerce Committee had identified that the Department of Health and Human Services (HHS) lacked an appropriation for bailing out insurance companies through the risk corridors. They asked the Government Accountability Office to look into the matter. That September, the GAO issued its legal opinion: the administration would need an appropriation from Congress to make outgoing payments.
Congress decided that the taxpayers should not be responsible for bailing out the insurance companies, and the taxpayers saved $2.5 billion this year.
The Republican Congress can say that it accomplished at least one thing this year.