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Bailing Out Health Insurers and Helping Obamacare

8:01 AM, Jan 13, 2014 • By JEFFREY H. ANDERSON
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Importantly, Laszewski (who’s in a position to know) says that “my sense is that health plans, because they are so insulated from big losses, will generally stand pat with their 2014 rate structures for 2015—no matter how bad the early claims experience looks.  I expect that the health insurance industry will be content to give the Obama administration one more chance to reboot Obamacare in the fall of 2014, when the 2015 open enrollment takes place.”

In other words, because taxpayers will bail them out (through both the “Reinsurance Program” and the “Risk Corridor Program”), insurers won’t raise their premiums as much for 2015 as they otherwise would in response to the sicker, older risk pools that Obamacare is clearly attracting.  This in turn will make Obamacare look better going forward than it should and will give its government-run exchanges another good swing at the “young invincibles,” who so far don’t seem too enamored with the product that Obama and his insurance cronies are hawking.

All of this puts two things in sharp relief:  First, Republicans should attach a no-bailout provision to any debt-ceiling increase—as Charles Krauthammer has suggested—along with a provision delaying Obamacare’s liberty-sapping individual mandate (the delay of which would further undermine Obamacare’s exchanges).  Second, Obamacare needs to be comprehensively repealed in January 2017, not modified or “fixed”—and Republicans need to advance a winning alternative to pave the way to that crucial result.

UPDATE: Senator Marco Rubio introduced a bill in November to stop the part of the bailout that would take place through the Risk Corridor Program.

Jeffrey H. Anderson is executive director of the newly formed 2017 Project, which is working to advance a conservative reform agenda.

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