Oy: Trump budget proposal includes $11.5 billion in ObamaCare insurer bailouts

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.

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So you'd think that the last thing President Trump would do is propose to spend $11.5 billion on these very bailouts in his current budget proposal. You'd think that, but you'd be wrong:

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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Leaving ObamaCare in place means year after year of this same fiscal insanity

The federal government is already subsidizing premiums for millions who buy health insurance on the ObamaCare exchanges. But even those subsidized premiums aren't enough to prevent the insurers from losing billions providing coverage under the law, so now the federal government is having to subsidize the other end by bailing out the insurers as well. This is the convoluted, idiotic system the Republican Congress had a chance to repeal last year. It couldn't get the job done because a handful of Republican senators - and we'll specifically call out Susan Collins, Lisa Murkowski and John McCain here - had more faith in a government-concocted scheme like this than they have in the free market to take care of people's needs via private arrangements people and companies make on their own. This is the system those senators saved. If we really do run $1 trillion deficits in coming years, there will be many causes of that, but one people should look at is how much the ObamaCare Medicaid expansion, as long with ObamaCare premium support and insurer bailouts, have contributed to the increase in federal outlays. Leaving ObamaCare in place means year after year of this same fiscal insanity. You don't solve this by "taxing the 1 percent." You solve it by replacing it with an entirely new system based on economic reality.

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