Bloomberg/Washington Post: Obamacare Is a $1 Trillion Windfall for Insurers
5:27 PM, May 15, 2012 • By JEFFREY H. ANDERSON
The Washington Post reports on a new study by Bloomberg Government, which shows that the repeal of Obamacare would cost health insurance companies more than $1 trillion — yes, that’s trillion — over the remainder of this decade alone. Why? Because Obamacare would transfer colossal sums of money from American taxpayers, through the federal government, to private insurers — and repeal would keep that transfer from occurring.
“The majority of [insurance companies’] loss [as a result of Obamacare’s repeal] — $880 billion — would be from the 16 million Americans expected to purchase coverage on the individual market. Two-thirds of that revenue would be in the form of federal subsidies, for low- and middle-income Americans to purchase coverage. The rest would come from individuals, responsible for whatever part of the premium subsidies do not cover.”
The Post adds, “Another $220 billion would be lost from [Obamacare’s] Medicaid expansion, where states have often turned to insurers to manage the entitlement program.”
This report simply helps confirm what has long been apparent: President Obama may like to villainize health insurers, but his signature legislation would require Americans to buy insurers’ product under penalty of law and would subsidize the purchase of that product with truckloads of taxpayer dollars.
In that vein, the Post concludes by quoting Bloomberg Government health care analyst Matt Barry, who says, “It kind of makes you scratch your head a bit to wonder why insurers initially opposed [Obamacare]. But maybe after it passed, they finally ran the numbers and realized what was at stake.”
Of course, the tradeoff for insurers is that they would essentially cease to function as private companies. Instead of trying to offer products that Americans actually want, they’d be forced to do the bidding of — and offer the products preferred by — Obama and his secretary of Health and Human Services, Kathleen Sebelius.