The hidden bailout clauses for insurance companies in the Affordable Care Act should be thrown out, says syndicated columnist Charles Krauthammer.
"First order of business for the returning Congress: The No Bailout for Insurance Companies Act of 2014," Krauthammer says
. "Make it one line long: “Sections 1341 and 1342 of the Affordable Care Act are hereby repealed. End of bill. End of bailout. End of story."
Krauthammer was referring to the two segments in President Barack Obama's healthcare law - Section 1342 or the "risk corridor provision" mandates that the government has to cover 80 percent of insurance company losses.
Section 1341, the "reinsurance" fund, collects $63 per insured person from insurers and self-insuring employers, which translates into around $20 billion over three years for the government to cover losses from insurance companies.
'Never heard of these?" wrote Krauthammer, who's also a Fox News contributor. "That’s the beauty of passing a bill of such monstrous length. You can insert a chicken soup recipe and no one will notice."
Jason Furman, chairman of the Council of Economic Advisers, said last month
that the government's plan was to sign up enough young and healthy people under Obamacare to balance the books for the healthcare costs from the elderly and the infirm.
He called it "Plan A" when asked whether there was a backup plan if Obamacare all went wrong.
"Plan A is to do the most aggressive enrollment efforts you can, with young people, using social media," he said. "It's in the insurance companies' interest to sign these people up."
But Krauthammer points out that there is a Plan B.
"It’s a government bailout," he wrote. "Administration officials can’t say it for political reasons. And they don’t have to say it because it’s already in the Affordable Care Act, buried deep."
He said that Obamacare was a huge gamble from the start because it depends on getting 40 percent of the sign-ups to be young and able to counterbalance the cost of healthcare for the less-abled.
But with Obamacare far underperforming on its enrollment estimates
of 3.3 million being signed up by Dec. 1, the insurance industry is in danger is facing an uncertain future with shrinking revenues and rising costs that could end with a "death spiral," says Krauthammer.
The insurance companies would then either pull out of Obamacare or declare bankruptcy.
The only answer for the government is a bailout or "escape hatch" as the columnist calls it.
He urges the GOP House to pass a bill repealing the two sections, which would be supported by millions of Americans who dislike "fat cat bailouts." Krauthammer said, "why should their tax dollars be spent not only saving giant insurers but also rescuing this unworkable, unbalanced, unstable, unpopular money-pit of a health-care scheme?"
When the bill is sent to the Senate, it would create quite a quandary for certain Democrats senators seeking reelection this year in close races. "Who can argue with no bailout? Let the Senate Democrats decide: Support the bailout and lose the Senate. Or oppose the bailout and bury Obamacare."
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