Another week, another possible unilateral and unconstitutional revision of ObamaCare from the White House — this time in the way the bill was successfully designed to buy the support of the nation’s insurance companies.
A few more months of this, and as Election Day approaches the president will be announcing that everyone will get a free oil change with their ObamaCare.
Susan Ferrechio of The Washington Examiner reports that the administration may extend the subsidy program it offered to insurers beyond 2016, when the program was set to expire.
What? you say? Subsidies to evil rich insurance companies? Yessiree.
Under ObamaCare, insurers are at risk of losing money if they sign up too many sick and elderly people and not enough young and healthy people.
All insurance is based on the “risk pool” concept: Some people (typically the young and healthy) don’t use much health care, so they cost their insurer less than they “pay in” in premiums; that covers the people (typically older and sicker) who take out more than they pay in. If more people take out than put in, the insurance companies have a cash-flow crisis.
This was deemed a particular danger at the beginning of ObamaCare, while the new health-care system found its sea legs. To help insurers avoid disaster, the government promised to mitigate the damage insurers would suffer through a “risk corridor” mechanism that would funnel money to insurers with especially large losses.
In theory, this would work both ways: If the companies make way more than they should, they have to give back to the government. This actually happened with the “risk corridor” subsidy in the 2003 law creating a prescription-drug entitlement under Medicare — the program proved so successful and smooth that insurers sent money back to the government.
But there’s no hope of that happening with ObamaCare, given the disastrousness of its rollout. Meanwhile, the companies have taxpayers over a barrel, as Yuval Levin writes on National Review Online.
The new law “commits taxpayers to cover insurance-company losses beyond a certain level and places no limit on the taxpayers’ exposure to the risk of such losses,” Levin says. “Taxpayers could easily end up turning over billions to cover insurer losses.”
If the administration is planning to extend the risk corridors past 2016, that is yet another admission of the disastrous nature of the ObamaCare rollout. Despite happy talk a few weeks ago about how signups had accelerated in January and more young people were on board, the administration either doesn’t know or is lying about how many of the new enrollees are actually paying for their new health care, which is the point.
The administration’s continuing efforts to mitigate the potential political and economic damage of its signature bill underline a point made by the liberal journalist Jonathan Alter in a forthcoming article in Foreign Affairs magazine.
“More than just the future of the ACA and the fate of the Democrats in this November’s midterm elections are now at stake,” Alter writes. “American liberalism is based on the faith that an active government can improve the lives of people — that the government possesses the core competencies necessary to implement an ambitious agenda. But if ObamaCare isn’t fixed soon, that faith could be seriously undermined, making it much harder for progressives to advance any social reform in the foreseeable future.”
Meanwhile, The New York Times tells us that Democrats have hit upon an exciting new strategy in the midterm elections: Talk about ObamaCare!
“Party leaders have decided on an aggressive new strategy to address the widespread unease with the health care law,” Ashley Parker reports, “urging Democratic candidates to talk openly about the law’s problems while also offering their own prescriptions to fix them.”
The late Ed Koch was once asked if he would consent to have his picture taken with a tiger. “The mayor is not a coward — and the mayor is also not a schmuck,” he said. If Democratic candidates adopt this “aggressive new strategy,” they won’t just be posing with a tiger, they’ll be putting their heads in the tiger’s mouth.
They will demonstrate that they’re not cowards. But they sure will be schmucks.