Yesterday Ed Morrissey wrote about the fiscal insanity on display as the government poured more and more money into the failing Obamacare exchanges. The investments, to put it mildly, were ones which any bank manager with more than six hours on the job would have taken a pass on given the fiscal outlook for those enterprises. With that as a backdrop, this news likely won’t shock anyone too much. American taxpayers loaned – not allocated and paid for – these exchanges more than a billion dollars to get them started. To date the total amount repaid to us stands at zero and you shouldn’t expect that figure to go up any time soon. (Washington Free Beacon)
Not one of the failed co-ops under Obamacare has repaid a single dollar of the $1.2 billion in federal loans they received, according to a majority staff report produced by the Senate Permanent Subcommittee on Investigations.
Over the last nine months, the subcommittee investigated the 23 co-ops including the 12 that have failed and the 11 that remain in operation to see whether the Department of Health and Human Services properly handled taxpayer dollars in investing in these programs.
Sen. Rob Portman has gone over the books and determined that we may just have to write that cash off.
“It is unlikely they will pay any significant fraction back,” he said. “The latest statements show that the failed co-ops’ non-loan liabilities exceed $1.13 billion—which is 93 percent greater than their reported assets, including money they expect to receive. On top of that, they owe $1.2 billion to the federal government. We should not hold our breath on repayment.”
Andy Slavitt, acting administrator for the Centers for Medicaid and Medicaid Services, said that he does not expect taxpayers will be repaid when asked by Sen. Ben Sasse (R., Neb.) what percent of the loans would be paid back.
“Do I expect we’re going to recover 95 percent or 100 percent of these loans?” asked Slavitt. “No, I don’t.”
The key thing to observe here, which I alluded to above, is that this was not the cost of the program as an approved spending initiative. If the House of Representatives had approved that money as spending and it went south, well… you can’t win ’em all. But much like the Detroit auto industry bailout, these were taxpayer backed loans which were expected to be repaid with interest. Another parallel is the Export Import Bank which makes taxpayer backed loans on a regular basis, though with an admittedly far better record of repayment. If the loan goes bad and the money isn’t returned, that’s our taxpayer dollars gone down a rat hole with no return.
When you combine the shaky nature of the investment which Ed described with the political climate surrounding it, the results are clear. This was a program which a first year economics student should have been able to identify as a sinking ship, but the Democrats were motivated by political reasons to keep flushing cash into it to preserve the tale they were spinning about the American healthcare market. Those assumptions proved false and now a billion dollars of your money has sailed off into the sunset.
This was an experiment which has proven little more than the fact that Washington is barely able to manage the budget for mowing the lawn. Asking them to master something this complex was a fool’s errand, and yet Hillary Clinton is basing her campaign on preserving the gains we’ve made. This should work out wonderfully if she’s elected President.