Obamacare's a "Bailout" Now? Conservative Critics Are Getting Desperate
Conservatives used to say Obamacare is socialized medicine. Now they say it is a government bailout of insurers.
The new claim is just as misleading and cynical as the old one.
The latest conservative plaything is a pair of previously obscure Obamacare features: reinsurance and risk corridors. Their mechanisms are a bit complicated to explain. (Read here if you want the details.) What matters is their shared purpose, which is to reimburse insurance companies that end up taking heavy lossessay, because the new marketplaces dont attract enough young, healthy subscribers. Remember, insurers depend on premiums from people in good health to subsidize the costs of the sick. Without the right mix, the premiums insurers collect wont be sufficient to cover the cost of clams. Theyll lose money, raise premiums in the future, drop out of the market altogether, or some combination of the three. In short, bad stuff will happen.
To Obamacare supporters, reinsurance and risk corridors are tools for stabilizing the insurance market and easing the transition from the old system to the new. (Thats why Ive been calling them shock absorbers.) But the provisions started attracting scrutiny from the right in the fall, when policy watchers like David Freddoso of Conservative Intelligence Briefing first wrote about it. Now reinsurance and risk corridors are getting more sustained attention from the Weekly Standard, Fox News, and the conservative movement writ large. Republican Senator Marco Rubio has sponsored a bill to repeal the risk corridors. Why should taxpayers have to bail out health insurance companies in the increasingly likely event that ObamaCare leaves them with financial losses? Rubio wrote this week, in an op-ed for the Fox website. This is government favoritism and corporate cronyism at its worst, and its taxpayers that will pay the price unless we stop it. Insurers are sufficiently spooked that, as Buzzfeeds Kate Nocera has reported, they are undertaking a lobbying campaign to keep the provisions in place.
More at http://www.newrepublic.com/article/116230/why-obamacare-not-bailout-insurers .
blkmusclmachine
(16,149 posts)quadrature
(2,049 posts)what would be a better term
than 'bailout'?
jmowreader
(50,559 posts)I came to the conclusion a long time ago that Republicans have no idea in hell how the business world works. This reinforces that conclusion.
Reinsurance is nothing outrageous or groundbreaking; rather, it's how insurance companies keep from going broke. That the Republicans are attacking it says that Republicans just want something to bitch about.
quadrature
(2,049 posts)bemildred
(90,061 posts)Doctor_J
(36,392 posts)I'd be surprised if the president didn't realize that at some point this huge giveaway to the already filthy rich insurance companies would backfire. And of course it leaves millions without while raising the rates of many.
TheKentuckian
(25,026 posts)The whole concept is about propping up and ensuring the viability of the cartel, I'd think the assertion would be completely uncontroversial.