Most Americans don’t think it’s their job to bail out insurance companies who lose money under Obamacare, but that’s exactly what’s poised to happen. Obamacare’s risk-corridor program — which President Obama has been using as a slush fund to placate his insurance allies and keep them quiet about his lawlessness — shifts financial risk from insurers to taxpayers. According to the House Oversight Committee, health insurers expect Obamacare’s risk corridors to net them nearly $1 billion, at taxpayer expense, this year alone.
Obamacare’s risk-corridor program is designed to redistribute money in the Obamacare exchanges, from health insurers who make money to those who lose money. But the Obama administration pressured insurers to set rates as low as possible despite Obamacare’s myriad mandates that have driven actual insurance costs up dramatically. Knowing that the risk-corridor program was in place, insurers willingly played ball with the administration, figuring that even if they lost money, they’d still find money — through this helpful program. It was a win-win that would boost Obamacare in its early days — to the benefit of those who’ve gained extraordinary power at the expense of Americans’ liberty, and of those whose product has become mandatory for Americans to purchase.
The Obama administration claims that the risk-corridor program will be budget-neutral — that is, that it won’t cost taxpayers money — and the Congressional Budget Office (taking the administration at its word) has echoed that assessment. The House Oversight Committee, however, asked 15 insurance companies whether they expected to be paying money into the risk-corridor program this year or taking money out of it. One company said it expected to be paying money in, 12 said they expected to be taking money out, and two said they expected it to be a wash. The committee also asked 23 insurance co-ops the same question: two expected to be paying in, seven expected to be taking out, and 14 expected it to be a wash. Collectively, these insurers and co-ops expected to take out $725 million more than they expected to put in. Guess who’ll get the tab?
The Oversight Committee estimates that these 15 insurers and 23 co-ops cover roughly 80 percent of those who bought insurance through the Obamacare exchanges. That still leaves another roughly 20 percent who are covered by other insurers or co-ops. If those insurers or co-ops are expecting taxpayer handouts at the same rate as the ones who have already shared their expectations with Congress, then that $725 million tab would rise to about $900 million — nearly a billion dollars that would be funneled from taxpayers, through Washington, to insurers.
Recent polling by McLaughlin & Associates for the 2017 Project asked, “If private insurance companies lose money selling health insurance under Obamacare, should taxpayers help cover their losses?” By a tally of 81 to 10 percent, respondents said no. Nor was this a Republican-heavy poll — it included 38 percent Democrats and just 31 percent Republicans.
The House of Representatives has a great opportunity to go after Obamacare’s risk-corridor program. Then if the Senate fails to follow suit, Harry Reid and company can explain why they think Main Street Americans should help cover the losses of Obama’s insurance-company allies.
It has been days now (at least two of them) since General Motors has issued a recall on any of its cars. But then, the law of diminishing returns applies here. After the first 15 million, there aren’t that many GM vehicles left out there for recalling.
The bailout of GM – at a final cost to the Treasury of $10 billion and change – was a landmark event in evolution state capitalism, American-style. The company was saved, certain creditors were stiffed, the unions were protected, and the corporate culture, it seems, was not altered in any fundamental way.
The city that President Obama was credited with “saving” – before it turned out that he hadn’t – is getting a little help from Washington as it struggles through the largest municipal bankruptcy in American history.
Michigan officials and President Barack Obama'sAdministration are discussing a plan to free up $100 million in federal money to aid Detroit's retired city workers, the Detroit Free Press reported on Tuesday.
The script is familiar. General Motors’ top executive heading down to Washington to be grilled by Congress. As Joseph B. White of Market Watch reports, fifty years after the Corvair controversy that made Ralph Nader a household name:
Obamacare is like an onion: The more layers you peel back, the worse it smells. The latest revelation about this horrible law is the presence of a “risk corridor,” a euphemism for an insurance industry bailout that will occur sometime in the next year.
Robert Laszewski—a prominent consultant to health insurance companies—recently wrote in a remarkably candid blog post that, while Obamacare is almost certain to cause insurance costs to skyrocket even higher than it already has, “insurers won’t be losing a lot of sleep over it.” How can this be? Because insurance companies won’t bear the cost of their own losses—at least not more than about a quarter of them. The other three-quarters will be borne by American taxpayers.
Detroit failed after years of one-party rule (guess which one), mismanagement, and corruption. Businesses closed down. Buildings were left derelict until they were torched for the fun of it. Feral animals roamed the streets as the people fled. After the usual protestations that it would never happen, city officials were compelled to declare the largest municipal bankruptcy in the nation's history.
On the floor of the Senate today, Harry Reid, a Democrat, praised President Obama's auto bailout:
"As a matter of fact, Mr. President, the figures are really staggering," said Reid. "500,000 manufacturing jobs have been added, 1 million jobs have been saved due to the president's auto rescue program. So that's a fairly significant change."
The legislation to help those affected by Hurricane Sandy has been turned into something of a mini auto bailout, according to those familiar with the Obama administration's request. The request includes millions of dollars worth of cars, to be paid for by the federal government.
Obama's request, as detailed in a letter sent to Capitol Hill by the director of the White House's Office of Management and Budget, Jeffrey Zients, includes these requests:
The auto bailout debate, already a triumph of narrative over reality, took another turn for the absurd last week as both presidential campaigns exchanged salvos over what amounted to a misunderstanding about Chrysler's plan to build Jeeps in China.