Don’t Bail Out the Big Insurance Companies
When so many Americans are paying much higher prices for health
insurance under Obamacare and others can’t even afford to buy coverage,
it is wrong for our money to be used to bail out giant insurance
companies.
But as Charles Krauthammer points out in his recent column, an insurance company bailout is already written into the law, just waiting to kick in if the best-laid plans of the politicians and the bureaucrats go awry.
To keep their costs (and
our premiums) under control, insurance plans need about 4 in 10 of those
who enroll to be young and relatively healthy -- the type of people who
might be less inclined to buy insurance in the first place. If the rate
of young people signing up for coverage is much lower than that,
insurers will be in a financial bind, paying the expensive medical bills
of older Americans without more profitable young customers to balance
out the cost.
Normally that would force
the insurance companies to raise their premiums to cover the shortfall.
President Obama, however, knew that a process of rising prices and
declining healthy enrollees would destroy Obamacare. They needed a
solution that would hide the true costs. That solution was a taxpayer
bailout for insurance companies.
To compensate the insurance companies for the risk of signing on to
Obamacare, the law's designers slipped in a massive bailout provision:
if the companies’ costs turned out to be higher than they “anticipated,”
the federal government can cover as much as 80 percent of their losses.
This is a system that
encourages the insurance companies to be unrealistic about their risks
because you the taxpayer are set up to cover their mistakes.
After months of failing exchanges, there’s good reason to believe
that the customers who endured the frustration of online enrollment are
the ones who need health coverage the most--in other words, the most
expensive customers.
Compounding the problem,
the Obama administration has been modifying the law by presidential
pronouncement, largely in ways that will diminish the number of young
and healthy people enrolling. As Krauthammer describes in his column:
First, it postponed the employer mandate. Then it exempted from the individual mandate people whose policies were canceled (by Obamacare). And for those who did join the exchanges, Health and Human Services Secretary Kathleen Sebelius is “strongly encouraging” insurers — during the “transition” — to cover doctors and drugs not included in their clients’ plans.
The insurers were stunned. Told to give free coverage. Deprived of their best customers. Forced to offer stripped-down “catastrophic” plans to people age 30 and over (contrary to the law). These dictates, complained an insurance industry spokesman, could “destabilize” the insurance market. These modifications threaten to make the insurance plans on the Obamacare exchanges financially unsustainable, which would put the taxpayers on the hook for an expensive--in fact, virtually unlimited--bailout of the insurance companies.
Americans should say “no” to a bailout of the giant insurance companies. Read Charles Krauthammer’s column here. Then sign our petition:
I call on Congress to block any bailout for big insurance companies under Obamacare by repealing sections 1341 and 1342 of the Affordable Care Act. When Americans have to pay more for insurance and many cannot even buy insurance it is totally wrong for our money to be used to bail out giant insurance companies.
Your Friend,
Newt
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