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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Still dead to me.

HornetSting on November 15, 2013 at 2:02 PM

And another amnesty bill. Go away.

anotherJoe on November 15, 2013 at 2:03 PM

Yes, let’s not subsidize the “corporate welfare bums,” an expression the Dems have appropriated in spirit, if not yet in exact wording, from Canada’s socialist New Democrat Party.

Gosh, I’m enjoying all this for a change.

Drained Brain on November 15, 2013 at 2:04 PM

Still dead to me.

HornetSting on November 15, 2013 at 2:02 PM

Me too. But I’ll give him credit for this. At least he’s making this an issue. No one is talking about this. Even talk radio hosts have overlooked(or ignored) it. It’s restricted to the blogosphere.

Doughboy on November 15, 2013 at 2:06 PM

Take away a risk corridor. Add an immigration corridor.

oldroy on November 15, 2013 at 2:06 PM

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 Best-case scenario:

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

If a Democrat votes to repeal Obamacare in full he would be absolved of his previous vote for Obamacare, and the Democrat would be much more likely to win the next election. There is an easy rationale for changing your vote: as Obamacare’s implementation began, it became clear as day that Obamacare turned out to be not at all what it was sold as.

anotherJoe on November 15, 2013 at 2:07 PM

Wow. This is gettin’ good.

BacaDog on November 15, 2013 at 2:07 PM

Wait a minute! Didn’t King Barack say that all this new wonderful health care WOULD NOT COST TAXPAYERS A DIME?

GarandFan on November 15, 2013 at 2:07 PM

“Won’t add one dime to the deficit.”

Riiiiight.

jdp629 on November 15, 2013 at 2:08 PM

Make. Them. Pay.

thebrokenrattle on November 15, 2013 at 2:08 PM

Maybe the Dems will start coming around, because of this, full on straight down nose dive: http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html

anotherJoe on November 15, 2013 at 2:09 PM

SCOAMF is so incompetent he can’t figure out if he want to go Socialist or Fascist. He really needs to make up his mind.

NOMOBO on November 15, 2013 at 2:10 PM

AP, sorry, but rather than repeatedly referring to Uncle Sam, you should be referring to U.S. taxpayers.

BuckeyeSam on November 15, 2013 at 2:10 PM

I had missed that one, no wonder insurance companies were so pro-obamacare.
its a win-win for them then.
now I think they are seeing how stupid it is.

dmacleo on November 15, 2013 at 2:10 PM

Take away a risk corridor. Add an immigration corridor.

oldroy on November 15, 2013 at 2:06 PM

We already have one of those it’s called the US Mexico border and it’s wide open.

ouldbollix on November 15, 2013 at 2:10 PM

That “risk corridor” bit was meant as another way to funnel taxpayer money to community organizers who decided to pass themselves off as health “insurance” outfits.

Steve Eggleston on November 15, 2013 at 2:12 PM

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

If a Democrat votes to repeal Obamacare in full he would be absolved of his previous vote for Obamacare, and the Democrat would be much more likely to win the next election. There is an easy rationale for changing your vote: as Obamacare’s implementation began, it became clear as day that Obamacare turned out to be not at all what it was sold as.

anotherJoe on November 15, 2013 at 2:07 PM

You know what? I can live with that. We’ll still pick up a lot of Senate seats next year regardless, but if a few blue or purple staters survive by agreeing to repeal Obamacare, that’s a tradeoff I’m perfectly ok with. It would be the Democrats themselves repudiating progressivism and voluntarily rolling back something they’ve been dreaming about for a century.

Doughboy on November 15, 2013 at 2:12 PM

Erick Ericsson said the Upton bill was trap and that it would force the GOP to defend the insurance industry. Seems like this would negate Erick’s point.

WashJeff on November 15, 2013 at 2:15 PM

Karl Rove tried to explain this last night on Greta’s show but he forgot his whiteboard and got lost in the details…wind up calling it a “bribe” for the insurance companies.

d1carter on November 15, 2013 at 2:15 PM

Well played, Senator Rubio. Well played.

GOPRanknFile on November 15, 2013 at 2:17 PM

CNN is all over the Toronto mayor story….heh.

d1carter on November 15, 2013 at 2:17 PM

I think it is reasonable to expect bi-partisan Repeal soon. You have LameDuckDynasty as Pres who, let’s face it, was King Deception of over-selling the ACA..Repeal truly will be the only thing that will give them a chance of holding their seat. But would Prezzy veto and could you get an override in the Senate–hummm….

hillsoftx on November 15, 2013 at 2:18 PM

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

anotherJoe on November 15, 2013 at 2:07 PM

Once again proving that she’s full-on delusional. That’s just not gonna happen.

Noonan blithers:

Most of them had no idea what they were voting for. They’re as surprised as anybody at what’s happened.

Methinks she’s talking about herself more than anything else.

ElectricPhase on November 15, 2013 at 2:19 PM

“Please like me, conservatives!”

CurtZHP on November 15, 2013 at 2:19 PM

Yeah I saw this and you could see the lights go on in Megyn’s eyes when he was saying well, in ObamaCare insurances may not make money right away but they won’t not be paid. ObamaStash!!

Marcus on November 15, 2013 at 2:19 PM

We already have one of those it’s called the US Mexico border and it’s wide open.

ouldbollix on November 15, 2013 at 2:10 PM

But the local radio station just had a news story this morning that said immigration prosecution is way up under the Obama administration.

Is it possible they were shilling for him?

oldroy on November 15, 2013 at 2:20 PM

All this talk of risk corridors and such reminds me of Apollo 13. Dem House and Senate offices must be feeling as if the next year leading up to the election will be like the Apollo 13 reentry scene.

http://www.youtube.com/watch?v=eURy8NskhGM

I’m betting and hoping the heat shield doesn’t hold up for them no matter what they do.

BuckeyeSam on November 15, 2013 at 2:21 PM

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.

Looks very analogous to the Minimum Wage hike talk.

AeroSpear on November 15, 2013 at 2:21 PM

keep ‘em coming GOP, another unknown of this wunnerful law and good job Rubio…you have a lot of ground to cover, good to see you headed in the right direction

DanMan on November 15, 2013 at 2:22 PM

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

Hey, while Republicans are at it, maybe toss a few pro-free market hand grenades, like doing away with any restrictions on the federal books against buying health insurance from out-of-state companies.

Mark V. on November 15, 2013 at 2:22 PM

Um.

How is it a “risk” corridor, if your losses are covered by the house?

That would actually be a padded corridor.

budfox on November 15, 2013 at 2:24 PM

This does have the effect of bringing to light this provision of obamacare.

Light disinfects.

davidk on November 15, 2013 at 2:25 PM

That “risk corridor” bit was meant as another way to funnel taxpayer money to community organizers who decided to pass themselves off as health “insurance” outfits.

Steve Eggleston on November 15, 2013 at 2:12 PM

Honestly, shite like this should convince Americans that every special provision in legislation be cross-referenced to the source of the provision. That would make it a lot easier to determine who we should tar and feather.

BuckeyeSam on November 15, 2013 at 2:25 PM

I, for one, have always criticized corporate welfare, I can’t be responsible for the tens of millions of people who vote for Democrats.
 
libfreeordie on August 17, 2012 at 11:09 AM

rogerb on November 15, 2013 at 2:25 PM

It will not get the Senator out of the dog house with most conservatives, but this is a good move that places more pressure on Dingy Harry.

Eliminating this bailout / safety net effectively preempts any promises of extra taxpayer funded protections for insurance companies ‘playing ball’ with the President’s ‘fix’ as well as ending this safety net as a possible protection against the death spiral being mitigated by floods of taxpayer dollars.

It probably has zero change of Dingy Harry letting it see the floor of the Senate, but it will highlight costs and risks that have yet to be really explored in the EpicClusterFarkNado.

I think it’s a good strategy to float out these targeted bills to start putting pressure on the Congressional Democrats and get their votes on the record before the GOP Caucus offers up another complete repeal bill – say in mid to late January 2014. (Need time to let things simmer….)

Athos on November 15, 2013 at 2:26 PM

Obama lies?

I will not sign it if it adds one dime to the deficit, now or in the future, period.

Obama has a lot of periods.

faraway on November 15, 2013 at 2:26 PM

You know what? I can live with that. We’ll still pick up a lot of Senate seats next year regardless, but if a few blue or purple staters survive by agreeing to repeal Obamacare, that’s a tradeoff I’m perfectly ok with.
Doughboy on November 15, 2013 at 2:12 PM

I agree.
Obamadoesn’tCare shouldn’t have even seen the light of day, much less the pen of the President. If repeal helps some democrats, who cares?! This monstrosity needs to be crushed.

Sterling Holobyte on November 15, 2013 at 2:27 PM

Obama has a lot of periods.

faraway on November 15, 2013 at 2:26 PM

Well, he is kind of feminine. ;)

Sterling Holobyte on November 15, 2013 at 2:28 PM

I like Rubio. And wouldn’t mind him being President. That is, if I wasn’t absolutely terrified of what he’d do with the border once elected. And, quite frankly, there is nothing that he can say that can mitigate that concern at this point.

besser tot als rot on November 15, 2013 at 2:28 PM

“Please like me, conservatives!”

CurtZHP on November 15, 2013 at 2:19 PM

It will be fascinating to see Rubio keep introducing bill after bill to try to obliterate his working with Schumer, McCain & company. Nothing is going to erase the fact he lied about amnesty in order to get elected.

In the credibility lost column, you’ll find Rubio’s name right under Obama’s.

INC on November 15, 2013 at 2:29 PM

Kabuki theater by a regressive politician trying to build conservative credentials.
Ignorant and stupid are the only targeted audience for this performance.

astonerii on November 15, 2013 at 2:29 PM

I bet that there’s a bunch of establishment types that have come up with these ideas and have been turning them over to Rubio rather than taking credit for themselves. They want primary voters to forget about Rubmnesty.

blammm on November 15, 2013 at 2:30 PM

Still dead to me.

HornetSting on November 15, 2013 at 2:02 PM

Dead man legislat’n. Its weak pile on. He wants to win my heart back, he should throw some haymakers. A bill forbidding the installment of pediphilia into the curriculum of our grade schools. Its a bright light for Mr. and Ms. low info on core curriculum. While he’s at it, a bill denying the attorney general the right to murder anymore Mexicans without written permission from the president.
Booyah your war on anything drones. You deserve to be kicked continously while you are down.

onomo on November 15, 2013 at 2:31 PM

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.

So insurers get significantly more money back the more they under-estimate the price?

Hmmmmm. Why would the government want to incentivize insurers to underprice their policies?

AZCoyote on November 15, 2013 at 2:32 PM

It will be fascinating to see Rubio keep introducing bill after bill to try to obliterate his working with Schumer, McCain & company. Nothing is going to erase the fact he lied about amnesty in order to get elected.

In the credibility lost column, you’ll find Rubio’s name right under Obama’s.

INC on November 15, 2013 at 2:29 PM

You’re absolutely right.

BUT. This bill is good politics and should be supported. We’ve got an opening here and ought to take it.

Doomberg on November 15, 2013 at 2:32 PM

No doubt one of the bills amendments will be hidden amnesty.

Faux toughness from a weasel sell-out.

rrpjr on November 15, 2013 at 2:32 PM

That “risk corridor” bit was meant as another way to funnel taxpayer money to community organizers who decided to pass themselves off as health “insurance” outfits.

Steve Eggleston on November 15, 2013 at 2:12 PM

Honestly, shite like this should convince Americans that every special provision in legislation be cross-referenced to the source of the provision. That would make it a lot easier to determine who we should tar and feather.

BuckeyeSam on November 15, 2013 at 2:25 PM

But, but–it’s only fair!

davidk on November 15, 2013 at 2:33 PM

I’m 90 percent sure it won’t pass

It’s the RINO way. Don’t fight… until we win!

faraway on November 15, 2013 at 2:33 PM

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.

No, not so far so good. That is completely against what makes a free market work. Penalizing companies for cutting costs and rewarding them for increasing them? Hello? Perverse incentive?

Yes, that’s really going to encourage insurers to operate efficiently – a big fat check from the government if they do a bad job, and a fine if they do it well.

RINO in Name Only on November 15, 2013 at 2:34 PM

“Please like me, conservatives!”

CurtZHP on November 15, 2013 at 2:19 PM

HA!

workingclass artist on November 15, 2013 at 2:35 PM

Wait a minute! Didn’t King Barack say that all this new wonderful health care WOULD NOT COST TAXPAYERS A DIME?

GarandFan on November 15, 2013 at 2:07 PM

It doesn’t count. He didn’t say “period” or “guaranteed.

ziggyville on November 15, 2013 at 2:37 PM

Doomberg on November 15, 2013 at 2:32 PM

I agree.

I’m just watching Rubio flail around and introduce bills that don’t mean sticking his political neck out.

INC on November 15, 2013 at 2:37 PM

Two funny paragraphs from Michael Walsh at NRO.

http://www.nationalreview.com/corner/364060/napoleons-advice-gop-michael-walsh

BuckeyeSam on November 15, 2013 at 2:38 PM

AKA the “Please Vote For This And Make My Career Politically Viable Again Even Though I’m a Cloaked RINO” Act.

Still dead to me, too. RINOs can’t change their…spots…or something.

orangemtl on November 15, 2013 at 2:38 PM

Reminder: Marco Rubio is a liar.

Panther on November 15, 2013 at 2:40 PM

Ironically enough Health Insurance providers, Kaiser Permanente and United HealthGroup happened to be big campaign bundlers for obama. See Anthony Welters, his wife and kids and their donations to the cause.

United HealthGroup also owns QSSI. Who was named one the primary overseers of continuing healthcare.gov repairs.

HumpBot Salvation on November 15, 2013 at 2:40 PM

RINO in Name Only on November 15, 2013 at 2:34 PM

one of us isn’t getting it. No repub voted for the risk corridor concept, and I didn’t even know about it. I admit I haven’t read the 2,700 page bill and its 10,000 pages of regulations added to it though. Are you arguing against Rubio introducing his effort to eliminate this aspect of it?

DanMan on November 15, 2013 at 2:42 PM

I had missed that one, no wonder insurance companies were so pro-obamacare.
its a win-win for them then.
now I think they are seeing how stupid it is.

dmacleo on November 15, 2013 at 2:10 PM

Yep.

The biggest threat to them is genuine competition. But for a swarm of new blood to come in, the pioneers leading the way need to make a good deal of profit, which is exactly what they do when an unhealthy industry becomes so inefficient that there is lots of room for undercutting. The new guys make a killing while the old ones face surprise expenses.

Of course, because of the structure of this brilliantly conceived law, removing this card from the house creates a perverse incentive (which already existed, but is now worse) for insurance companies to do everything they can to drive away sick people (who they are not allowed to charge more, and thus must cover at a loss), by offering crappy service at lower prices, so that people who don’t interact with them as much (i.e. healthy people, who are forced to pay enough to make a profit)) will flock to their plans, while all the sick people will run to their competition (such as it is), until their competitors undercut them in turn with even crappier service.

“Race to the bottom,” anyone?

RINO in Name Only on November 15, 2013 at 2:45 PM

“The truth is this, ObamaCare was a house built upon sand. Republicans said it was for years. And now, and now that the sand is melting away from underneath this thing, it’s amazing how many times we have to hear, “why don’t you help fix it? Come pour a real foundation,’” he insisted. On the previous day, CNN’s John Berman had implied that Republicans should help fix the law instead of trying to do away with it.

http://newsbusters.org/blogs/matt-hadro/2013/11/15/theblazes-will-cain-schools-cnn-gop-being-ordered-fix-law-it-didnt-pass

davidk on November 15, 2013 at 2:45 PM

Reminder: Marco Rubio is a liar.

Panther on November 15, 2013 at 2:40 PM

Even if this is just to score political points in a vain attempt to rehab his image with conservatives, it’s still a good bill to push. So he has my support, regardless of his motivations.

Doughboy on November 15, 2013 at 2:46 PM

Kabuki theater by a regressive politician trying to build conservative credentials.
Ignorant and stupid are the only targeted audience for this performance.

astonerii on November 15, 2013 at 2:29 PM

Ignorant and stupid audience?

You are on the wrong thread. You need the one discussing Obama’s presser yesterday….where he mentioned his newly-discovered revelation that buying insurance can be a complicated process.

Hope this helps.

ziggyville on November 15, 2013 at 2:48 PM

Two funny paragraphs from Michael Walsh at NRO.

http://www.nationalreview.com/corner/364060/napoleons-advice-gop-michael-walsh

BuckeyeSam on November 15, 2013 at 2:38 PM

Good points. Except this isn’t entirely true:

Don’t do something, just stand there. You didn’t vote for it, not once, not a single time, ever.

They did vote to fund it. Just last month.

besser tot als rot on November 15, 2013 at 2:51 PM

Keep going Rubio. The more you offer the closer you come to being forgiven. I’ll let you know when it’s enough. (I learned this from my wife)

kcewa on November 15, 2013 at 2:52 PM

Even if this is just to score political points in a vain attempt to rehab his image with conservatives, it’s still a good bill to push. So he has my support, regardless of his motivations.

Doughboy on November 15, 2013 at 2:46 PM

I guess I agree with Ace…

“Make the Democrats vote to affirm each and every egregious and unpopular part of this bill.

Make them own it, until they beg us to let them repeal it.”

http://ace.mu.nu/

Have a Tsunami of Obamacare bills picking this crapola apart.

workingclass artist on November 15, 2013 at 2:53 PM

“I will not sign it if it adds one dime to the deficit, now or in the future, period.’

- President Barack Obama before a Joint Session of Congress, 09.09.09

Rubio should name his bill the ‘Helping President Obama Keep His Promise Act.’

Rub some more salt in the wound.

FTR: The GAO has projected that Obamacare will add $6.2 trillion to the country’s long-term deficit…and that was when they were expecting everything to go perfectly.

Resist We Much on November 15, 2013 at 2:53 PM

Take away a risk corridor. Add an immigration corridor.

oldroy on November 15, 2013 at 2:06 PM

That was funny.

KMav on November 15, 2013 at 2:54 PM

“Please like me, conservatives!”

CurtZHP on November 15, 2013 at 2:19 PM

If he does something worthy of praise:
“Please like me, conservatives!”

If he does nothing at all:
“He’s all style, and no substance.”

GOPRanknFile on November 15, 2013 at 2:57 PM

Rubio is nothing if not an idiot. The idea the man was ever considered Presidential material is laughable.

First the lying about the Schumer immigration scam, now he wants to screw the insurance industry. Why? Because they capitulated when Democrats controlled House, 60 votes in the Senate, and the White House and were essentially threatening to socialize the whole game?

Swim back to Cuba, punk.

Adjoran on November 15, 2013 at 2:59 PM

one of us isn’t getting it. No repub voted for the risk corridor concept, and I didn’t even know about it. I admit I haven’t read the 2,700 page bill and its 10,000 pages of regulations added to it though. Are you arguing against Rubio introducing his effort to eliminate this aspect of it?

DanMan on November 15, 2013 at 2:42 PM

No, I’m arguing for Rubio’s bill. AP said “so far so good” in response to the basic idea behind the risk corridor, then pointed out that the problem was there was no limit to how much loss they would subsidize.

I’m saying even if there were, it’s still antithetical to everything that makes free markets worse.

(Though, see my 2:45 comment for why it’s there.)

I only heard about the risk corridor fairly recently. I understand what it’s there for: it’s a rule to mitigate the perverse incentive created by two other mandates – the individual mandate and guaranteed issue. And, in fact, the former, itself, was introduced to mitigate the effect of the latter.

There are other fun incentives all over this piece of crap. For example, the requirement that a certain percentage of premiums are required to be spent on coverage, rather than profits or other expenses. So, if I am an entrepreneur and realize that I can address the ridiculously small networks offered by many of these plans, by offering people a much wider network in exchange for a lower level of reimbursement, and it turns out a lot of people are interested in my plans because Obama broke his promise about being able to keep their doctor, well, too bad, papa government knows better.

We can’t have people purchasing substandard insurance. What if a 50 year-old man got accidentally got himself pregnant and didn’t have sufficient coverage? Don’t you heartless wing-nuts even care about him?

RINO in Name Only on November 15, 2013 at 3:02 PM

Adjoran on November 15, 2013 at 2:59 PM

The insurance companies brought this on themselves by getting in bed with the Obama administration in the first place. They could have fought like they did during the Clinton administration. They didn’t because they wanted more profits.

Well, it’s time for insurance companies to be just as exposed as the rest of us. Why should ‘If you like your profits, you can keep your profits’ trump ‘If you like your plan, you can keep your plan’?

I will NOT support crony capitalism and will oppose ANY AND ALL bailouts.

Resist We Much on November 15, 2013 at 3:02 PM

Obama is like a pyromaniac who sets a building on fire, lets the fire engulf the building, and then says, “Well, the fire department has my royal permission to put it out, so if it burns down, it’s their fault, not mine”. The man is sick in the head.

Clearly, Obama is trying to set the insurance companies up as his scapegoat by saying they can just uncancel the cancellations that he forced them to make..

VorDaj on November 15, 2013 at 3:04 PM

Even if this is just to score political points in a vain attempt to rehab his image with conservatives, it’s still a good bill to push. So he has my support, regardless of his motivations.

Doughboy on November 15, 2013 at 2:46 PM

I agree. Just a reminder that he is a certified liar…

Panther on November 15, 2013 at 3:04 PM

Now that Cruz and Lee have taken all the incoming fire and his fellow RINOs are back out on the battlefield when the coast is clear Mr. Rubio has decided to “lead” the troops.

Wigglesworth on November 15, 2013 at 3:06 PM

Swim back to Cuba, punk.

Adjoran on November 15, 2013 at 2:59 PM

In cement overshoes.

VorDaj on November 15, 2013 at 3:06 PM

Swim back to Cuba, punk.

Adjoran on November 15, 2013 at 2:59 PM

In cement overshoes.

VorDaj on November 15, 2013 at 3:06 PM

I’ll second, third and fourth those sentiments.

TxAnn56 on November 15, 2013 at 3:15 PM

Look, the insurance companies are culpable for having agreed to this union of government mandates and forced enrollment. I have no sympathy for them.

BUT – when the Death Spiral comes – and it will, won’t that result in the demise of the insurance industry and our forced reliance on government provided health care? Or will new companies rise from the ashes?

Hill60 on November 15, 2013 at 3:25 PM

Is CMS Looking to Use Obamacare Bailout Money as Slush Fund to Bribe Insurance Companies to Play Ball?

—Ace

Note the below post on Rubio’s proposal that we repeal the “risk corridor” (bailout) provisions of Obamacare, and then compare to what Obama’s minions may have in mind.

Just read the whole thing.

It certainly does seem as if CMS is viewing to illegally rewrite the law such that the provisions for a bailout — unrestricted, by the way; there is no cap on what the feds may spend on these bailouts — can be used to pay off insurers for the new costs they’ll be incurring under Obama’s proposed “fix.”

Resist We Much on November 15, 2013 at 3:27 PM

Isn’t the risk corridor one of the subjects Bam-Bam is addressing as I type with the insurance executive whores?

I gather this dirty cash stash has already been authorized/appropriated, and that BO doesn’t need any congressional authorization to spend it as he pleases.

matthew8787 on November 15, 2013 at 3:27 PM

1 big problem with this bill – it would move us closer to a single-player government health care system.

hawksruleva on November 15, 2013 at 3:29 PM

So, when did Rubio know about this bailout of the insurance industry?

This whole thing should be looked at for RICO violations. It’s nothing more than a big Ponzi and MLM scheme.

moonsbreath on November 15, 2013 at 3:29 PM

Swim back to Cuba, punk.

Adjoran on November 15, 2013 at 2:59 PM

In cement overshoes.

VorDaj on November 15, 2013 at 3:06 PM

I’ll second, third and fourth those sentiments.

TxAnn56 on November 15, 2013 at 3:15 PM

Stay classy, folks.

GOPRanknFile on November 15, 2013 at 3:29 PM

This is what Rubio’s proposed bill is intending to counter….

As previously reported, the Administration’s latest plan waives many of the costly mandates included in Obamacare that are scheduled to take effect on January 1, 2014. The guidance says that these requirements will be waived—in clear violation of the text of the law—for one year for all plans renewed between January 1, 2014, and October 1, 2014. CMS also implies these waivers could be extended, stating it will “assess…whether to extend [the waivers] beyond the specified timeframe.”

However, the real story is buried in the final paragraph of the three-page memo, where CMS implies it is exploring options to provide additional payments to insurers to offset their losses from this Obamacare debacle:

Though this transitional policy was not anticipated by health insurance issuers when setting rates for 2014, the risk corridor program should help ameliorate unanticipated changes in premium revenue. We intend to explore ways to modify the risk corridor program final rules to provide additional assistance.

To translate into English: If some Americans can keep their pre-Obamacare health plans next year, they will not enroll in the Obamacare exchanges. That means the enrollees in the exchanges are likely to be sicker than insurers previously expected. Already this afternoon, the health insurance industry trade association has alleged the President’s “fix” could have a significant impact on premiums in the marketplace, for that very reason.

The CMS guidance today raises the possibility of using Obamacare’s risk corridor program to compensate insurers for these losses. Briefly stated, the risk corridor program shifts funds among insurers—it minimizes losses from carriers with sicker-than-expected enrollees, by redistributing gains from carriers with healthier-than-expected enrollees.

CMS’s comments today imply that it’s contemplating exactly that—undoing the concept of budget neutrality for the risk corridor program, and using it to compensate insurers for their losses.

According to the Congressional Budget Office, Obamacare already gives more than $1 trillion in subsidies to insurance companies over the next 10 years. President Obama’s extra-legal “fix” could now result in the Administration offering insurers a bailout totaling billions of dollars more.

Wasn’t another of the President’s promises that Obamacare would not add ‘one dime’ to the deficit? Someone is going to pay for the shenanigans of the Administration trying to save the EpicClusterFarkNado, and that someone will be the us.

Athos on November 15, 2013 at 3:33 PM

The GOPe will try hard to screw even this one up. Will they succeed?

Bmore on November 15, 2013 at 3:37 PM

Soooooon – the democrats are going to be in a dual to the death with Obama……

They will get rid of Obama before Obama can drag the whole party down….

Just watch – the democrats have no honor, they have no faith, most of them are godless souls who would sell their mother to a pimp if it meant re-election.

redguy on November 15, 2013 at 3:49 PM

I want someone w/ standing – some small insurer, perhaps — to step forward to challenge Obama’s illegal executive order/administrative fix in Federal District Court. This “fix” is a boon to the larger companies and could put smaller insurers out of business.

I despise this corrupt Administration.

matthew8787 on November 15, 2013 at 3:49 PM

The GOPe will try hard to screw even this one up. Will they succeed?

Bmore on November 15, 2013 at 3:37 PM

In a bar fight it is better if you watch and duck then to start throwing punches.

redguy on November 15, 2013 at 3:50 PM

Soooooon – the democrats are going to be in a dual to the death with Obama……

How so? He’s cutting a dirty deal w the insurers right now at the White House to save every RAT he can.

matthew8787 on November 15, 2013 at 3:50 PM

How about starting a conservative health care fund???

Let conservative donate into a pot (charity) and let’s take care of the people losing health policies due to ObamaCare. We can make deals with doctors and hospitals directly. Cut out insurance and the government.

Let’s pass a law that will allow this.

redguy on November 15, 2013 at 3:52 PM

Remembering that Obamacare passed solely on Democrat Party votes and used an corrupt legislative process to pass, the insurance companies still sold out the American people out for a profit.

If you loathed your insurance company before, surely that has grown to deep hatred.

Selling out the American people, based on a straight party line vote, for profit, should have a price.When you’ve thrown in with despots to improve your bottom line, that’s not democracy and the results are predictable.

Companies and any other group supporting such one-sided, despotic governmental maneuvers should be put on notice. Such cowardice cuts both ways and now the pendulum is swinging back.

I have zero empathy for them. May they go out of business or pay a very deep price for their gutlessness and lack of support for wise, democratic processes.

Marcus Traianus on November 15, 2013 at 4:08 PM

Not sure what Rubio’s long view is. Creating a system accelerating the bankruptcy of health insurance providers is one of the easiest ways to creating the conditions to support single payer.

DaveO on November 15, 2013 at 4:11 PM

AP puts this Rubio blog post as a “Top Pick”. LOL.

Wigglesworth on November 15, 2013 at 4:12 PM

Someone should create an ad with Ted Cruz image with big bold font: “This is why we thought it was worth a short gov shutdown: to prevent this disaster! No one listened to us before this diabolical law was passed and no one listened to us now.”

md on November 15, 2013 at 4:27 PM

So why isn’t the House passing another full repeal of Obamacare at this instant?

Stop the piecemeal bills, which are just providing cover for the so-called moderate Dems and their GOP enablers, and repeal that crap NOW!!

TheRightMan on November 15, 2013 at 4:38 PM

Insurance for insurance — you mean re-insurance?

Or is this more like a derivative?

Oh, that’s just great!

The problem with Sen. Rubio’s proposal is the Dem’s will absolutely pass it, as it adds to the risk of insurance companies defaulting — which is the ACA’s intent all along.

Rosey on November 15, 2013 at 5:31 PM

Commenting on Los Angeles Clippers’ Matt Barnes using the “N” word on Twitter and the Miami Dolphins bullying investigation on TNT’s “Inside the NBA,” Barkley stated he will continue to use the racial slur around his friends and that white people should not dictate how he talks.

“I’m a black man. I use the ‘N’ word,” Barkley said. “I’m going to continue to use the ‘N’ word with my black friends, with my white friends. They are my friends.”

J_Crater on November 15, 2013 at 5:50 PM

Very good move by Rubio..I hope he can make it happen..:)

Dire Straits on November 15, 2013 at 6:05 PM

That’s nice. But there is still no way and nothing he could ever possibly do to get me to vote for him.

MPan on November 15, 2013 at 6:44 PM

Just repeal Obamacare. Vote on full repeal. Get all of those Democrats down on the record as supporting this boondoggle yet again.

Theophile on November 15, 2013 at 6:47 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

Serious question: with the website the way it is, are there really enough pre-existing condition types signed up to create a crash?

That is, with no-one signed up, the downside for insurers just can’t be all that huge. The pool is going to be incredibly toxic, but it’s a small pool. Will the insurers squawk about it or just eat the loss to stay in good with Obama?

TexasDan on November 15, 2013 at 7:00 PM

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