By Chris Jacobs
The Centers for Medicare and Medicaid Services (CMS) today released guidance
to state insurance commissioners implementing President Obama’s “fix”
for people losing their insurance. Not only does it violate the explicit
text of Obamacare itself, but it also raises the possibility of
insurers getting access to a new pool of bailout funds.
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.
But as has been noted elsewhere,
the risk corridor program “doesn’t need to be budget neutral; if the
math demands it, the government can pay out more than it collects
through the program.” 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. It’s one
more reason why there is only one real Obamacare “fix,” and that’s
scrapping the law entirely.
No comments:
Post a Comment