Why the GOP Is Looking to the Omnibus Spending Bill to Limit Obamacare’s ‘Insurer Bailout’

Senate Democrats blocked GOP efforts Thursday to repeal Obamacare’s risk corridor program, which Republicans have referred to as a taxpayer-funded bailout of insurers. Now, conservatives are looking to the $1.1 trillion omnibus spending bill to continue restricting the use of taxpayer dollars for the program.

As Congress begins to debate this year’s omnibus spending bill, Sen. Marco Rubio, R-Fla., is urging GOP congressional leaders to use the must-pass legislation as the vehicle to further restrict the program’s access to taxpayer dollars.

“If the only way Obamacare can continue is for taxpayers to bail out health insurers that lose money because of it, that’s as good an indication as any that the whole law should be repealed and replaced,” the Florida senator wrote in a letter to Republican leadership last week. Rubio continued:

It is our responsibility to completely shield the U.S. taxpayer from a deal in the omnibus that might reimburse health insurers retroactively for these losses or any other future losses. The best way to do this is to include the language in the omnibus that we have already used twice to prevent a taxpayer-funded bailout.

Republican Reps. Jim Jordan of Ohio and Tim Huelskamp of Kansas echoed Rubio’s displeasure with the risk corridor program and said at an event on Capitol Hill earlier this week they would oppose any measure that provided additional money to it, as would the approximately 40-member House Freedom Caucus, of which Jordan chairs.

“We certainly don’t want to bail out Obamacare and [be] bailing out big insurance companies,” Huelskamp said.

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Prominent conservative leaders also called on Republican leadership to continue restricting the use of taxpayer dollars for the risk corridor program, as the language included in last year’s spending bill did, in a letter sent last month.

“The risk corridor program represents a microcosm of [Obamacare], and one of its most insidious provisions, as it attempts to hide the true costs of Obamacare from insurance companies and beneficiaries, and instead spread it out among hardworking taxpayers,” the letter read. “Eliminating the risk corridor program’s ability to do this represents a major blow to the law and a step toward increasing transparency in Obamacare’s exchanges.”

The signatories of the letter included Heritage Action for American Chief Executive Officer Michael Needham, Americans for Tax Reform President Grover Norquist and Club for Growth President David McIntosh.

On Thursday, the Senate used a budget tool known as reconciliation to pass a package, 52-47, repealing key components of Obamacare and stripping Planned Parenthood of its federal funding for one year. The reconciliation package was unveiled by Senate Republicans earlier this week and originally included a provision to repeal the law’s risk corridor program.

During debate over the reconciliation bill Thursday, Sen. Patty Murray, D-Wash., objected to the provision repealing the risk corridor program, saying it violated the Byrd Rule—which mandates provisions of a reconciliation bill be budgetary in nature—and arguing the measure served political interests.

“It is yet another effort to pander to the extreme political base rather than working with us to strengthen health care for our families,” Murray said.

Following Murray’s objection, Democrats blocked Republicans’ efforts, 52-47, to override the parliamentarian’s ruling— which required 60 votes— and repeal the risk corridor program.

Murray’s objection earned ire from Rubio, who was instrumental in restricting the money available for the risk corridor program during the 2014 government spending debate.

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Since 2013, Rubio has been a consistent voice against the risk corridor program, which he argues serves as a taxpayer-funded bailout of insurers.

During debate over the $1.1 trillion omnibus spending bill in 2014, the Florida Republican limited the amount of money available for the risk corridor program by introducing a provision prohibiting the use of taxpayer dollars for it. Instead, the Centers for Medicare and Medicaid Services could use only fees collected by the insurance companies themselves.

The risk corridor program, which is in place until 2017, is intended to provide stability for insurers in the health insurance market. The program requires insurers profiting above a specified threshold to share a portion of their profits with the federal government. Those that lose more than a specified threshold, meanwhile, receive financial assistance from the government.

However, conservatives have warned that the program services as a “bailout” for insurance companies that fail to profit under Obamacare.

Source material can be found at this site.

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One Comment

  1. When Obamacare was being dreamed up, the idea was to insure all classes of risks combined and promulgate policy costs by an average derived from lumping all risks together. Obviously, it was a necessary tactic to make a show of any success in registering consumers for Obamacare.
    The concept quickly fell apart. The Obamacare website was a flop, those people given jobs as “Navigators” were hastily prepared to answer consumer questions as best they could.
    Licensed insurance agents must be tested in most state jurisdictions I know of after extensive study in order to market, in this case, Health Insurance coverage. After the initial testing and licensing, periodic “continuing education” courses are mandatory for agents to keep abreast of any coverage changes or policies. Unless state requirements are satisfactorily met by agents, their licenses are suspended until confirmation of continuing education courses completion.
    None of this was required among Obamacare “Navigators” who presumed to give advice in certain instances, or usually none at all.
    Also, the fact that insurance risks were put aside to derive attractive premium rates seemed the strategy. But, the Obama government disregarded every tried and true insurance concept of underwriting and employed “slight of hand” for its results.
    Now, we have arrived at today and the fiasco that materialized. The rates are soaring, the deductibles to be met, exclude many current policyholders who can not initiate coverage by paying the scheduled deductible prior to necessary treatment.
    This is a case of the Obama regime assuming it could discard proven underwriting requirements to launch its drive for Obamacare.On the way to that, I believe Obama implied to insurers that this government would cover losses in excess of what the insurers could pay.(through magic!) Actually, insurers must have financial reserves put aside to cover “shock losses” or the state in which the insurer provides suspends the company from doing business until such time that its reserves are adequate to cover the risks. Here is where “the regime” depended upon going to Congress to cover unsustainable losses. Congress only finances what monies come into the treasury via taxes we pay. It cannot be a “fast and loose” operation, which is how Obama would conduct business. Laws are irrelevant to him, so is the national treasury and so is the stupendous national debt.

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