Rubio to introduce bill that would repeal “risk corridor” — a.k.a. bailout — provisions of ObamaCare

posted at 2:01 pm on November 15, 2013 by Allahpundit

Goooood politics. I’m 90 percent sure it won’t pass, but last week I would have told you I was 100 percent sure. At the rate O and his boondoggle are melting down on the Hill, there’s no down side to trying to force Democrats to vote on all sorts of bills that would chip away at parts of O-Care. Worst-case scenario: They fail but with some Democratic support, which means a rolling PR disaster for the White House and a very small margin of error going forward lest the Democratic turncoats in Congress start thinking maybe it’d be better to repeal this thing and be done with it.

How about it, Mary Landrieu? Yes or no to tossing billions in hard-earned tax money at insurers to clean up the gigantic mess you, they, and Obama have made?

Obamacare includes a provision that allows the federal government to funnel taxpayer dollars to insurers that face the prospect of losing too much money under the new health care law, and conservative critics want to repeal it.

Sen. Marco Rubio, R-Fla., said the provision could amount to a bailout of the insurance industry, which stands to lose if the troubled Obamacare exchanges fail to enroll enough people to make the system financially viable. Obamacare enrollment has already been stymied by glitches at the healthcare.gov sign-up site and it could be dampened again under an administrative fix President Obama proposed this week to resolve problems with millions of cancelled policies…

“We need to protect taxpayers from having to bail out anyone as a consequence of Obamacare,” Conant said in an email exchange with the Washington Examiner. “Rubio’s bill will fully repeal the ‘risk corridor’ provision in Obamacare, preventing a bailout.”

If you’re unfamiliar with the “risk corridor,” read David Freddoso’s short but useful explainer from last month. Nutshell version: An insurer who’s offering a plan on the ObamaCare exchange sends a cost projection for that plan to HHS. If it comes in a bit under cost, they cut a check to HHS for the difference; if it comes in a bit over cost, HHS cuts them a check to make up the shortfall. It’s a way for insurers to spread the risk of cost miscalculations among themselves. Adrianna McIntyre, the economist who inspired Freddoso’s post, calls it “insurance for the insurers.” So far, so good. Problem is, there’s no cap on losses that HHS might be forced to cover if lots and lots of individual plans end up costing way more than the insurers projected. If a plan’s actual cost exceeds 103 percent of the projection, Uncle Sam covers half of the overrun; if actual cost exceeds 108 percent of the projection, Uncle Sam covers 80 percent.

If ObamaCare was working perfectly, the risk of many plans coming in way over budget would be small. Healthy people would be enrolling by the millions on Healthcare.gov, flooding insurers with tons of new revenue they could use to pay for sick people’s preexisting conditions. Thanks to President Bumblefark’s incompetence, though, Healthcare.gov is a smoking ruin; young healthy people can’t sign up, which means no cash for insurance companies to cover their hefty new expenses. That leaves Uncle Sam partially on the hook for the difference. The punchline, though, is that Obama’s “fix” yesterday only makes it worse. If insurers bring back the old, cheap plans, all of the healthy people who’ve had their coverage dropped and who are supposed to provide new revenue by buying the more expensive exchange plans will revert to their old coverage. That’ll leave the exchange plans with even more sick enrollees and fewer healthies, compounding insurers’ losses. Uncle Sam’s on the hook for even more now.

Via the Weekly Standard, here’s David Cutler, one of the architects of O-Care, admitting last night that an insurance industry death spiral isn’t out of the question here. In fact, though, the “risk corridor” is designed to reduce the risk of a death spiral; so are the taxpayer subsidies for lower-income enrollees on the exchanges, which can (at least theoretically) be increased to keep pace with premiums if/when they start to rise. Without the risk corridor and the subsidies, the only way for insurers to make back their losses this year is to jack up premiums next year, which will further discourage healthy people from enrolling, which in turn will make the exchange risk pools even sicker and more costly, and thus the death spiral is set in motion. Thanks to Uncle Sam’s “generosity,” they might not have to do that. But all of this points to the same basic fact: The more adverse selection there is on the new exchanges, the more unanticipated costs there’ll be. Those costs will be borne either by the insurance industry, if Rubio’s bill prevails and the “risk corridor” provision is eliminated, or mostly by the federal government, in the form of a bailout and higher subsidies. The political challenge of Rubio’s bill for Democrats is that they don’t want to be on the wrong side of yet another TARP-like government giveaway to an unpopular industry, but on the other hand they can’t take away insurers’ “risk corridor” safety net or else the industry might turn on ObamaCare and then the whole thing will implode. Dilemmas, dilemmas.


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Comment pages: 1 2

GOPRanknFile on November 15, 2013 at 6:48 PM

Very good point..:)

Dire Straits on November 15, 2013 at 7:14 PM

…the amnesty ass__ole…is dead to me!

KOOLAID2 on November 15, 2013 at 7:31 PM

If insurers bring back the old, cheap plans, all of the healthy people who’ve had their coverage dropped and who are supposed to provide new revenue by buying the more expensive exchange plans will revert to their old coverage.

The plan is for “brosurance” ads to win them over.

David Blue on November 15, 2013 at 8:31 PM

This is fine to point out, but if what if some of these gimmick bills pass? Or watered down version get introduced by Democrats with Republicans signing on? Then you could have a series of band aid bills instead of full repeal.

Dongemaharu on November 15, 2013 at 8:32 PM

Peggy Noonan says the Democrats may vote for full repeal of Obamacare

anotherJoe on November 15, 2013 at 2:07 PM

She’s just talking to get attention.

Rubio too.

David Blue on November 15, 2013 at 8:35 PM

Rubio to introduce bill …

So, what sort of INSTANT AMNESTY / OPEN BORDERS clause is traitor Rubio going to slip into this bill?

Pork-Chop on November 15, 2013 at 8:54 PM

So, what sort of INSTANT AMNESTY / OPEN BORDERS clause is traitor Rubio going to slip into this bill?

Pork-Chop on November 15, 2013 at 8:54 PM

He’s just jerking you around. It creates more tension if you don’t know when the next big sellout will be.

It’s coming though. Someone who will sell you out once will sell you out a hundred times.

David Blue on November 15, 2013 at 9:02 PM

Glad he’s trying to actually come up with a solution instead of just making speeches. I hope the others learn from him.

GOPRanknFile on November 15, 2013 at 6:48 PM

He’s also got a solution to America being too white and not Mexican enough.

David Blue on November 15, 2013 at 9:09 PM

He’s just jerking you around. It creates more tension if you don’t know when the next big sellout will be.

It’s coming though. Someone who will sell you out once will sell you out a hundred times.

David Blue on November 15, 2013 at 9:02 PM

ABSOLUTELY. Rubio has proven himself to be a pathological LIAR, an obama-style opportunist and a treasonous liberal worm. He has lost all credibility and MUST NOT be trusted on any issue.

Pork-Chop on November 15, 2013 at 9:11 PM

He’s also got a solution to America being too white and not Mexican enough.

David Blue on November 15, 2013 at 9:09 PM

Yeah, I’m sure that’s why the white folks that support amnesty want it too. It’s because we’re “too white.”

GOPRanknFile on November 15, 2013 at 9:14 PM

ABSOLUTELY. Rubio has proven himself to be a pathological LIAR, an obama-style opportunist and a treasonous liberal worm. He has lost all credibility and MUST NOT be trusted on any issue.

Pork-Chop on November 15, 2013 at 9:11 PM

I wonder if you felt this way when Palin was caught lying about the Bridge to Nowhere?

GOPRanknFile on November 15, 2013 at 9:56 PM

I wonder if you felt this way when Palin was caught lying about the Bridge to Nowhere?

GOPRanknFile on November 15, 2013 at 9:56 PM

Thank you Tokyo Rove for your gopE DISINFORMATION!

Throw the bull all you want. Your party is DEAD

All out Bush Mafia purge in 2014 and 2016 to take back the party that Reagan built!

And corruption lover, I reside in Florida. Jebbie’s little lapdog Waterboy couldn’t get re-elected here no matter what he does.

Thats 29 electoral votes that go to the Democrat if a conservative does not get the nomination.

This time we don’t stay home. That was so 2012. This time we vote for the Democrat because the corrupt Bush Mafia’s motto is “Better a Democrat than someone who is not one of us.” Time to give the corrupt gopE a taste of their own medicine, LOL!!!

Jayrae on November 15, 2013 at 10:26 PM

Jayrae on November 15, 2013 at 10:26 PM

I have no idea what’s up with all the non sequiturs lately. Shrug.

Although you spewed a lot of mindless drivel, just thought I would say Rubio will be re-elected without a doubt.

GOPRanknFile on November 15, 2013 at 10:39 PM

Jayrae on November 15, 2013 at 10:26 PM

*golf clap*..That was factless drivel..:)

Dire Straits on November 15, 2013 at 10:47 PM

Nice try RINIO, you will never be forgiven for pushing the amnesty bill.

bgibbs1000 on November 15, 2013 at 10:54 PM

I wonder if you felt this way when Palin was caught lying about the Bridge to Nowhere?
GOPRanknFile on November 15, 2013 at 9:56 PM

She was caught lying about it?

Dongemaharu on November 15, 2013 at 10:55 PM

She was caught lying about it?

Dongemaharu on November 15, 2013 at 10:55 PM

Yup. She said she was against the Bridge to Nowhere from the beginning, but of course, that’s just not the truth. Remember the whole, “I told Congress thanks but no thanks for that bridge to nowhere. If the state wanted to build a bridge we would built it ourselves.”

http://online.wsj.com/news/articles/SB122090791901411709

GOPRanknFile on November 15, 2013 at 11:00 PM

GOPRanknFile on November 15, 2013 at 11:00 PM

In that article, nowhere does it say she was against it from the beginning. Is there another article or quote where she says that? That quote you used is in fact true and backed up by her private emails.

Dongemaharu on November 16, 2013 at 1:11 AM

Repeal of this monstrosity.

AshleyTKing on November 16, 2013 at 1:13 AM

In that article, nowhere does it say she was against it from the beginning. Is there another article or quote where she says that? That quote you used is in fact true and backed up by her private emails.

Dongemaharu on November 16, 2013 at 1:11 AM

She said, in her convention speech, “I told Congress thanks but no thanks to that bridge to nowhere. If the state wanted to build a bridge, we would build it ourselves.” That’s just not true. She said no such thing. In fact, while she was campaigning for governor, she supported the bridge and the earmark for it. So when she said that she allegedly told Congress “thanks, but no thanks,” she’s claiming she opposed it from the beginning, considering the earmark came from Congress in the first place. This flies in the face of reality.

She did ultimately put an end to the project because everyone realized it wasn’t going anywhere, but the money earmarked for it was never returned.

GOPRanknFile on November 16, 2013 at 1:25 AM

What she was expressing was her opposition to it, yes, without testifying before congress or calling them up and talking directly to them. How accurate were the ways or words used to oppose it is definitely debatable, but she didn’t go so far as to use very definitive phrases like, “from the beginning,” or “never supported it.” She just didn’t. That is a very different thing, and if she’d done that, there would be Obama campaign ads doing side by sides.

Dongemaharu on November 16, 2013 at 1:40 AM

Dongemaharu on November 16, 2013 at 1:40 AM

Ah, but they didn’t have to. After it was seen as misleading and inaccurate, they dropped the line from her speeches altogether, because of all the flack the campaign was getting.

GOPRanknFile on November 16, 2013 at 1:42 AM

…shut up…drink your water!

KOOLAID2 on November 16, 2013 at 3:48 AM

Yeah, I’m sure that’s why the white folks that support amnesty want it too. It’s because we’re “too white.”

GOPRanknFile on November 15, 2013 at 9:14 PM

Yeah, actually. People like Bush, Rubio and McCain seem to perceive themselves as being above being “white”.

David Blue on November 16, 2013 at 4:48 AM

Forget how much you dislike Rubio and pay attention to what represents another gross campaign lie from Obama’s lying mouth: he promised that all bills will be given a sufficient airing for all to know what’s in it. Now we find there’s a Risk Corridor insurer bailout provision of sorts at taxpayer expense . Don’t recall Democrats mentioning this.

Obama’s lies keep on giving, namely astronomical amounts of your tax money.

Chessplayer on November 16, 2013 at 9:07 AM

We need to keep our fingerprints totally off this product of idiots and liberals.

ultracon on November 16, 2013 at 9:39 AM

Yeah, actually. People like Bush, Rubio and McCain seem to perceive themselves as being above being “white”.

David Blue on November 16, 2013 at 4:48 AM

I don’t think they think of themselves as “above being ‘white’” or “below being ‘white’.” Whether they think it’s the right thing to do or doing it for political reasons, it has nothing to do with being “above” anything. For most politicians, they’re just doing it to get an edge on the most sought after voting bloc in the country. And I don’t even support amnesty.

GOPRanknFile on November 16, 2013 at 10:15 AM

Good job Marco! While this probably won’t make it through the Senate, it is vital that the issue be made very public. In fact, if Rubio and the GOP do a good enough job then they will put enormous pressure on the Dems.

What’s more, in addition to being politically astute, this measure has the virtue of being the right thing to do for America!

MJBrutus on November 16, 2013 at 11:35 AM

Let’s orient the “Risk Corridor” up their collective ass.

Shaughnessy on November 16, 2013 at 1:24 PM

For most politicians, they’re just doing it to get an edge on the most sought after voting bloc in the country.

GOPRanknFile on November 16, 2013 at 10:15 AM

That Hispanics are “the most sought after voting bloc in the country” while working class whites are the voting bloc that has no explicit representation is already racial. When a group is as numerous as working class whites and it is not the most sought after group and nobody feels a need to do anything for its specific concerns, something is going on, and it’s not math. If it was purely about the numbers the politicians would be going explicitly for whites the way they do for blacks and Hispanics.

David Blue on November 17, 2013 at 3:23 AM

He’s also got a solution to America being too white and not Mexican enough.>>>>>

First, Rubio is not Mexican. His parents came from Castro’s Cuba.

Second, there is no love lost between Cubans and Mexicans. Cubans think they are superior to Mexicans. Mexicans do not like Cubans!

All Spanish-speakers are not the same.

francesca on November 18, 2013 at 10:07 PM

Comment stands. That’s where the hordes are coming from. And anyone who believed that because Cubans and Mexicans are not the same Rubio would stand firm against amnesty was proven wrong.

Rubio is a back-stabber. Someone who stabs you in the back once will do it a hundred times. Rubio should not be trusted at all.

David Blue on November 19, 2013 at 1:06 AM

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