The American Spectator posted an article today about the latest chapter in the ObamaCare saga. The article reminds us that the health insurance providers were initially supporters of ObamaCare. The article also reminds us that the insurance companies knew that they would not be able to make a profit under the rules of ObamaCare, but the plan was to have the taxpayers make up the loss.
The article reports:
In Christopher Marlowe’s Doctor Faustus, the sinful sawbones eventually thinks better of his bargain with the devil and does his best to weasel out of the deal. A number of health insurers, having made similarly cynical arrangements with the Obama administration, are now attempting to use the court system to escape the consequences of their cupidity. Knowing full well that they couldn’t make legitimate profits selling coverage through Obamacare’s exchanges, they relied on Democrat guarantees that their losses would be covered by the taxpayers. But a funny thing happened on the way to easy profits. Congress refused to appropriate the funds.
The insurance companies in question were told by the Obama administration that they could expect to have their bottom lines propped up by the “risk corridor” program. The magical thinking behind this boondoggle was that insurers enjoying big profits from Obamacare would pay into a pool from which less fortunate plans would be subsidized. In late 2015, however, the Centers for Medicare & Medicaid Services (CMS) announced that profitable insurers had paid in a mere $362 million while their unprofitable counterparts had requested $2.87 billion to cover their losses. Thus, the losers would be paid only 12.6 percent of their requests.
In 2012 the Republicans took over the House of Representatives and in 2014 they gained a majority in the Senate. The House of Representatives failed to appropriate the funds.
The article concludes:
…The performance of these Republicans has been disappointing in many ways. Still, by making the risk corridors budget neutral, they exposed the fundamental fiscal instability that defines Obamacare. This requirement was inserted largely due to a quiet effort by Senator Marco Rubio for which he has been savaged by the “news” media. The Washington Post, for example, described the Rubio contribution as follows: “a poison pill that is killing Obamacare from within.”
This is not an exaggeration. The restriction on using general funds to keep Obamacare afloat will drive the few remaining CO-OPs out of business and the remaining insurers out of the exchanges. Neither the Obama administration nor the congressional Democrats with whom they made their cynical deal can save them. In the end, the Devil will have his due.
The obvious answer here is to reintroduce the free market into health insurance. Let competition lower the cost. Create a risk pool for people with pre-existing conditions, much like the auto insurance industry does. Allow competition across state lines, and have the insurance follow the person so changing jobs is not a problem. Provide tax deductions for the cost of health insurance–if you don’t pay taxes, you don’t get the deduction. Also, take twenty-five-year-old adults off of their parents’ policies–it is time for them to take responsibility for themselves!