By Dan Calabrese ——Bio and Archives--February 15, 2018
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The core problem with ObamaCare has always been that its economic model is unsustainable. You can't mandate guarnateed coverage to those who are elderly or already sick without allowing insurers to charge what they'll need to cover the costs of such benefits. The Obama Administration tried to do it by mandating that everyone buy health insurance in order to expand the risk pool, but that requirement was ineffective and wildly unpopular - and now it's gone as part of the tax reform bill passed at the end of last year.
Because the Democrats knew they were mandating a system that couldn't stand up under its own insane structure, they built into ObamaCare a mechanism to bailout health insurers who lost money complying with the law's coverage mandate. When Donald Trump ran for president, he railed against these bailouts, rightly calling them one of ObamaCare's worst hidden elements.The proposed $11.5 billion would be used to pay claims on the so-called “Risk Corridors Program”—an Obamacare program that was supposed to be temporary. The program statutorily expired 14 months ago, and the insurers it was designed to fund have, in many cases, exited the market. Some have even gone bankrupt. Essentially, the “Risk Corridors Program” required insurers that earned “excess” profits (during the first three years of the operating of Obamacare exchanges) to pay money back into the program to subsidize those insurers that experienced “excess” losses. However, the losses thus far have exceeded the gains, and the program ran an $11.5 billion shortfall through 2016, when the law required the program to “sunset.” By all accounts, this was another failed government program. To make matters worse, the proposal both asks for an appropriation and proposes to put the program in the mandatory baseline—indicating that insurers are to be the beneficiaries of federal funding as a form of entitlement. And there’s more bad news: The idea is to exempt the $11.5 billion corporate welfare payment from budget sequestration, meaning federal spending on the program will be allowed to exceed the caps Congress just agreed to last week.
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Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain
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