After the Obama administration “quietly adjusted” provisions of the Affordable Care Act, famously known as Obamacare, so that health insurance companies can potentially receive federal taxpayer funding, senate-hopeful Rep. Bill Cassidy (R-LA) said he will propose legislation that will stop the bailout.
As the LA Times notes, the provision was buried within the enormous amount of pages of regulations in President Obama’s signature healthcare law. Under the change in the law, health insurance companies could make billions of additional taxpayer dollars if health insurance companies lose money while providing insurance under Obamacare.
But, Cassidy’s legislation, which Rep. Leonard Lance (R-NJ) is co-sponsoring, would impose restrictions on Obamacare’s risk corridor program and will ensure that it is budget neutral.
“The Obama Administration is asking American taxpayers to pay for insurance companies’ deficits,” said Cassidy. “The same insurance companies that supported Obamacare. This is wrong and I will oppose this bailout.”
Cassidy said the The Temporary Risk Corridors Program in Obamacare was set up to collect money from insurers and transfer it from companies with healthier, less expensive consumers to those with sicker, more costly consumers. If the program costs more than it brings in, according to Cassidy, the rule allows the administration to tap funds appropriated for other health programs to supplement payments to insurers.
Administration officials have been denying the fact that the Obamacare provision would be a bailout for health insurance companies. According to the Times, officials say most insurance companies should not need to excessively increase premiums because the law has factions in it that will protect them over time.
But the change in regulations essentially provides insurers with another backup: If they keep rate increases modest over the next couple of years but lose money, the administration will tap federal funds as needed to cover shortfalls.
On Capitol Hill, Republicans on the Senate Budget Committee began circulating a memo on the issue and urging colleagues to fight what they are calling “another end-run around Congress.”
Obama administration officials said the new regulations would not put taxpayers at risk. “We are confident this three-year program will not create a shortfall,” Health and Human Services spokeswoman Erin Shields Britt said in a statement. “However, we want to be clear that in the highly unlikely event of a shortfall, HHS will use appropriations as available to fill it.”
More than 8 million individuals have signed up for Obamacare, but the road still does not look bright for the future of the healthcare program. Insurance companies, according to the Times, have been looking at increasing their rates because of the unexpected amount of enrollees who are older and unhealthier than expected.
Temporary Risk Corridors Program was designed to help stabilize the new healthcare system by taking money from insurers and transferring it from health insurance companies with healthy customers to companies with sicker customers. The new system was supposed to pay for itself.
The Congressional Research Service issued a memo stating that funding sent to insurance companies through the risk corridor program must be approved by Congress. Therefore, the Obama Administration may not have the legal authority to make the payments to the insurance industry.