Obama admin to insurers: No worries, we’ll find “other sources of funding” for those risk corridors if need be

posted at 6:01 pm on May 16, 2014 by Erika Johnsen

Just a small smackerel of potentially very costly ObamaCare regulatory minutiae for a Friday afternoon, you know — the usual. Via the ever-vigilant Philip Klein at the Washington Examiner, it appears that the Obama administration felt the need to reassure insurance-industry lobbyists that the “risk corridor,” a.k.a. bailout, provision included in the president’s crowning legislative achievement will without a doubt be there to catch them if and when they fall.

The risk corridors are designed to siphon money away from the insurance companies that find themselves doing well in the law’s first years and redistribute it to insurance companies that find themselves struggling to keep premiums down whilst making ends meet, and while the administration has been blithely assuring critics that the provision will absolutely be budget-neutral, that promise of neutrality has been raising alarm among insurers worried that there won’t be enough money there if they end up having to charge “unexpectedly” high premiums and they suddenly need cash — prompting the administration to announce that it will find “other sources of funding” if push comes to shove. How nice.

The news, buried in a 435-page regulatory filing by the Centers for Medicare and Medicaid Services, undermines prior assurances by the administration that the program would be budget-neutral. …

In revised final guidance, CMS reiterates the intention for the program to be budget-neutral. However, the regulations provide added reassurance to insurers.

“As we stated in the bulletin, we anticipate that risk corridors collections will be sufficient to pay for all risk corridors payments,” the CMS document reads. “That said, we appreciate that some commenters believe that there are uncertainties associated with rate setting, given their concerns that risk corridors collections may not be sufficient to fully fund risk corridors payments. In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers. In that event, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.”

As Peter Suderman points out at Reason, CMS doesn’t mention what those other sources of funding might be, and it certainly doesn’t seem like there are any currently available/appropriated “other sources of funding” for the risk corridor payments. If push does come to shove, I rather highly doubt Congress is going appropriate any, no matter how hard the administration intones that Republicans are intentionally sabotaging their otherwise awesome law. So… is this just an empty reassurance for insurers while the Obama administration is livin’ on a prayer that everything works out according to plan, or does the Obama administration have other extralegal ideas in mind, as they have for so many of ObamaCare’s other troubles? Either way, I don’t like it. Not one bit.


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Drip, drip, drip ….

Chuck Ef on May 16, 2014 at 6:03 PM

The trough is empty, Jugears!

Patriot Vet on May 16, 2014 at 6:08 PM

The middle class is getting poorer. All Obama has left is small business. He wouldn’t dare take more money from his crony corporations.

When the stock market drops all hell will break loose.

darwin on May 16, 2014 at 6:09 PM

Erika, the number one receiver of campaign contributions from Aetna in the Senate is Mitch McConnell, he will make sure they get bailed out.

commodore on May 16, 2014 at 6:09 PM

Every single insurer in the country told everdiso that the numbers met or exceeded their wildest dreams.

So this is just another right wing lie.

Chuck Schick on May 16, 2014 at 6:12 PM

What do liberals think they won with this health care policy? I thought they like to see themselves as critical of corporations.

will77jeff on May 16, 2014 at 6:12 PM

All of this for 5 million people.

rogerb on May 16, 2014 at 6:12 PM

Drip, drip, drip, my ass. It is a wide-open spigot with millions pouring out every freaking day.

Chowderhead123 on May 16, 2014 at 6:13 PM

The middle class is getting poorer. All Obama has left is small business. He wouldn’t dare take more money from his crony corporations.

When the stock market drops all hell will break loose.

darwin on May 16, 2014 at 6:09 PM

The elimination of the middle class is the goal. That market drop would pretty much assure its destruction, I recon.

hawkeye54 on May 16, 2014 at 6:15 PM

http://www.opensecrets.org/

Aetna #1 recipient: Mitch McConnell

Humana #1 recipient: Mitch McConnell

United #1 recipient: Mitch McConnell

Blue Cross/Blue Shield #3 recipient (behind Begich/Cornyn): Mitch McConnell

commodore on May 16, 2014 at 6:15 PM

Obama admin to insurers: No worries, we’ll find “other sources of funding” for those risk corridors if need be

Must be nice to have such a cavalier attitude when using other people’s money.

Bitter Clinger on May 16, 2014 at 6:16 PM

What do liberals think they won with this health care policy? I thought they like to see themselves as critical of corporations.

will77jeff on May 16, 2014 at 6:12 PM

Probably control over the largest chunk of our lives. It was a nice thought but I don’t believe the Squishpublicans will ever repeal. Not the same ones talking amnesty.

Judge_Dredd on May 16, 2014 at 6:17 PM

the “risk corridor,” a.k.a. bailout, provision included in the president’s crowning legislative achievement will without a doubt be there to catch them if and when they fall.

The obligatory FIFY.

parke on May 16, 2014 at 6:24 PM

The insurers set their premiums precisely on an exoectation of 25-30%, and now that the numbers are coming in exactly as expected, they are no longer projecting any significant premium hikes for next year.

If you guys think the insurers are dissappointed by 28%, you’re fooling yourselves.

The self delusion around here is awe inspiring.

everdiso on May 2, 2014 at 5:09 PM

Chuck Schick on May 16, 2014 at 6:24 PM

or does the Obama administration have other extralegal ideas in mind, as they have for so many of ObamaCare’s other troubles

Extralegal ideas! That would be illegal ideas. If necessary, the money will be found, it will be off-budget, and it will be spun as completely normal activity.

The great thing is that the nuclear explosion of Obamacare comes with the implementation of the employer mandate. Then the excrement will truly hit the fan.

pilsener on May 16, 2014 at 6:26 PM

The One certainly has transformed America like he said he would. He’s taxing those who pay taxes and ‘redistributing’ the ill gotten gains to those who don’t. Now, he’s promised his Cronies in the ‘insurance industry’ that he will tax their cohorts who ‘make too much money’ and redistribute those confiscated gains to corporate losers. I can’t wait ’til he confiscates Ford’s profits and redistributes that dough to Shivalay.

vnvet on May 16, 2014 at 6:28 PM

As I have long advocated, the GOP needs the senate. With senate control, we can attach a sunset to the risk corridor funding to a debt ceiling increase. No risk corridors, insurers will flee the exchanges – even if it takes a couple of years to climb down.

This is the best means to dismantle Obamacare, because the Boy King cannot veto a debt ceiling increase. This is a fight he cannot win: debt ceiling, not govt operations.

This is one of several reasons why the White House is terrified of a GOP senate.

matthew8787 on May 16, 2014 at 6:28 PM

Either way, I don’t like it. Not one bit.

Neither do I, and I’d be willing to bet that you’ll find the answer to where those funds would come from buried in those additional 1, 147,271 words of regulation that were attached to the “Affordable Care Act”.

thatsafactjack on May 16, 2014 at 6:32 PM

The trough is empty, Jugears!

Patriot Vet on May 16, 2014 at 6:08 PM

They’ve got another card to play.

Demand federal tax payments now, on millions of tax deferred retirement accounts of people who diligently saved all of their lives.

Thereby cancelling out the designed purpose of these annuities, the ability to withdraw limited monies annually over an extended period of time in order to minimize taxes paid to the government.

It’s the same old song, punish success and reward failure.

fogw on May 16, 2014 at 6:34 PM

There is no new slush fund that the administration can tap into. This is bluster from the administration and probably means that the risk corridor funding is drying up faster than anticipated.

matthew8787 on May 16, 2014 at 6:35 PM

I don’t think this story is getting enough attention:

The Obama administration has given the go-ahead for a new cost-control strategy called “reference pricing.” It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.

Some experts worry that patients could be surprised with big medical bills they must pay themselves, undercutting financial protections in the new health care law. That would happen if patients picked a more expensive hospital — even if it’s part of the insurer’s network.

ABC Radio News covered the AP-based story on its morning broadcasts, it’s on the ABC website, and it was posted here earlier.

Otherwise crickets.

Drained Brain on May 16, 2014 at 6:38 PM

To O’Care Insurers: Isn’t corny capitalism (fascism) keen? Dance with the devil you will get burned.

old school on May 16, 2014 at 6:40 PM

It gets worse every day, I am sorry, but I want this whole disaster to implode.

It’s gonna hurt in so many ways, but perhaps with a clean slate and decent people in govt, we can come back.

The way things are going now it is a slow burn for everyone, get it over with and quick so the rebuilding can begin in earnest…

Scrumpy on May 16, 2014 at 6:40 PM

It’s pretty obvious what is happening. This is about the new Obamacare rates that have to be released right before the election. Given the insurance companies experience with the first year of Obamacare, since virtually no one but the sickest people are buying Obamacare, an honest repricing of rates would send them through the roof.

What the administration is doing is telling the insurance companies to under-price insurance for 2015. But if the insurance companies do that, they will lose huge amounts of money. That’s the signal here — they are telling the insurance companies not to worry about losses — because the administration is planning to bail them out for 2015.

So if they get away with it, the new insurance rates will come out right before the election, and prices will go up just a little bit, and it will not seem so bad. Except that the government will be pouring money into the insurance companies through the bailout schemes.

In other words, what we are seeing is open, transparent fraud on a monumental scale. And they’re hoping you won’t figure it out or notice.

jms on May 16, 2014 at 6:41 PM

jms on May 16, 2014 at 6:41 PM

Then there is YOU who has figured it out! ^5

Well done!!

Pass it on :)

Scrumpy on May 16, 2014 at 6:43 PM

As I have long advocated, the GOP needs the senate. With senate control, we can attach a sunset to the risk corridor funding to a debt ceiling increase. No risk corridors, insurers will flee the exchanges – even if it takes a couple of years to climb down.

matthew8787 on May 16, 2014 at 6:28 PM

Uh-huh. I believe Majority Leader McConnell has already called any bluff he’d make on that one.

“We were confronted with a clean debt ceiling in the Senate or default. I believe I have to act in the best interests of the country, and every time we’ve been confronted with a potential crisis, the guy you’re looking at is the one who stepped up to solve the problem,” McConnell told reporters.

de rigueur on May 16, 2014 at 6:49 PM

If push does come to shove, I rather highly doubt Congress is going appropriate any

LOL. As if Barky needs to wait for congress to act. Barky don’t need no stinkin’ laws — he is the law! He’s got a pen and a phone . . . and a huge stash of taxpayer cash that he’ll happily use to pay off his insurance company homies if times get tough for them because of Barky’s signature legislation.

AZCoyote on May 16, 2014 at 7:06 PM

You guys are totally wrong on McConnell. Get him re-elected with a senate majority, you are going to find him the most vicious, cut-throat opponent that Obama ever met. McConnell will put the brakes on federal judicial appointments, force debt ceiling spending reductions, help dismantle obamacare, and much much more.

McConnell is just positioning himself to get past re-election. Mitch despises Obama and everything he is trying to inflict on this nation. He is also a master parliamentarian who understands senate procedure and how to tie the Obama agenda into knots.

All of the “I hate McConnell” comments on this and other sites will be seen as tremendously naive.

matthew8787 on May 16, 2014 at 7:20 PM

If you are running a trillion dollar deficit you have no other unused pots of money just sitting around to give to the insurance companies. You could give them the taxpayers money, or some of the borrow money the taxpayers must repay. Obama should ask the taxpayers if they want to give hundreds of billions to the insurance companies.

leader4hru on May 16, 2014 at 7:29 PM

With all the Obamacare enrollment success we have been hearing about why would they need the risk corridor to bailout the insurers?

When the time comes for the bailout you can bet the numbers will be inaccurate and the deceitful administration will continue to blame obstructionist.

plutorocks on May 16, 2014 at 7:44 PM

In that event, HHS will use other sources of funding

They’ll stand on the street corner with hat in hand.

As for the insurance companies; they made their bed, now they can sleep in it.

GarandFan on May 16, 2014 at 8:01 PM

Cloward-Piven lives.

hillbillyjim on May 16, 2014 at 9:13 PM

All of the “I hate McConnell” comments on this and other sites will be seen as tremendously naive.
matthew8787 on May 16, 2014 at 7:20 PM

The naivety is strong in this one. A master parliamentarian in the minority party can run circles around the majority opposition. That Mitch couldn’t make Reid go out day in and day out ranting about McConnell this and McConnell that puts lie to the notion that he absolutely despises all that the progressives stand for. Speaking of which, why isn’t Mitch out in front of the Senate with a daily monologue?

AH_C on May 16, 2014 at 9:25 PM

Obama admin to insurers: No worries, we’ll find “other sources of funding” for those risk corridors if need be

Anyone around here still want to feel sorry for these insurance companies like when Obamacare first came out?

Dr. ZhivBlago on May 16, 2014 at 10:14 PM

…what risk?

KOOLAID2 on May 17, 2014 at 12:00 AM

http://www.opensecrets.org/

Aetna #1 recipient: Mitch McConnell

Humana #1 recipient: Mitch McConnell

United #1 recipient: Mitch McConnell

Blue Cross/Blue Shield #3 recipient (behind Begich/Cornyn): Mitch McConnell

commodore on May 16, 2014 at 6:15 PM

Say, Einstein, did you know Democrats control the Senate, and Harry Reid is Majority Leader? Did you know he rules with an iron fist? Did you know Republicans can’t even get their amendments to the floor, much less get bailouts for donors?

Or are you just an ignorant idiot?

Adjoran on May 17, 2014 at 12:56 AM

All of the “I hate McConnell” comments on this and other sites will be seen as tremendously naive.

matthew8787 on May 16, 2014 at 7:20 PM

The weak, the ignorant, and the impotent always seek a scapegoat to blame, and it is invariably one of their betters.

Adjoran on May 17, 2014 at 1:23 AM

HHS may of course direct some their appropriated funds to the risk corridors, which were designed upon the false premise that the profit and loss on the exchanges would equal out among insurers.

There is probably not a single cabinet department which is not awash in funding that isn’t directly specified to a single purpose, especially now that earmarks have been virtually outlawed.

If you don’t like Obama having so much discretion over the money, maybe you should have considered this before jumping on the bandwagon against earmarks, which only specify how funds are to be spent. There was never anything wrong with earmarks as long as they were publicly disclosed, it was the ones that were sneaked in without hearings or in conference that were the problem.

But why would anyone think a situation through before taking action?

Adjoran on May 17, 2014 at 1:28 AM

Congress needs to immediately state categorically that losses will not be covered without the approval of the House. The insurers having loved Obama, and did his bidding, need to face the taxpayers for any free money. Let them raise the rates charged to Obamacare enrollees to cover any losses.

leader4hru on May 17, 2014 at 1:31 AM

If you like your insurance company, you can keep your insurance company. Period. We’re goin’ down the funnel toward VAcare just as planned.

Kissmygrits on May 17, 2014 at 8:44 AM

Erika Johnsen:

I rather highly doubt Congress is going appropriate any, no matter how hard the administration intones that Republicans are intentionally sabotaging their otherwise awesome law.

With due respect, I disagree.

The GOP is all about attracting progressive votes – hence immigration reform which will add tens of millions of new progressive voters to the Obamacare rolls.

The GOP leadership will roll over and wet themselves eventually on funding risk corridors.

It’s not their money.. why should they care as long as they get the votes.

DrDeano on May 17, 2014 at 10:24 AM

Illegal…period…

sorrowen on May 17, 2014 at 12:31 PM

Obama nas a phone and a pen, he don’t need no Congress to do as he pleases. Dictators never require any approval of what they do, he will just take money from the Border security fund, which he has not intention to use for border security, and Congress as well as the American people can just suffer. Obama does not care, he hates These United States, White people, Military, and everything NOT Communist.

namvet6869 on May 18, 2014 at 11:29 AM