Report: WH Assured Insurers of Bailout From Obamacare Losses

Wednesday, 30 Jul 2014 01:15 PM

By Andrea Billups

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A new report from Republican members of the House Oversight and Government Reform Committee shows that White House adviser Valerie Jarrett worked to soothe concerns from insurance companies fearful they would lose money in Obamacare's "risk corridors" program.

"Documents show that Ms. Jarrett took the warnings of the insurance companies very seriously," noted the report, which outlined the insurers' growing concerns that a cash pool to be used to cover insurers who might lose money — funds that came from insurers who turned a profit — would eventually run out.

Jarrett soothed those fears that a bailout program would be in place, and one that could, if necessary, be funded by taxpayers, Fox News reported.

Jarrett fielded worried calls from insurance executives about rising premium costs, her emails show. Chet Burrell of Carefirst Blue Cross Blue Shield, whose company represents parts of Virginia, Maryland, and the District of Columbia, reached out to her amid fears that his company would have to raise premiums if the administration continued on a path to make the healthcare program "budget neutral."

"If this is indeed the policy, then carriers will have to price premiums as if the Risk Corridor feature is not fully available," Burrell wrote in a memo to Jarrett that got her attention. "Uncertainty or confusion will equate to higher rates. This could confront the administration with a sea of far larger premium increases than expected. Once the filings are made, they will likely quickly become public."

She responded: "I checked and the policy team is aggressively exploring options … I really appreciate you bringing this to my attention."

Republicans continue to raise concerns that taxpayers will be slammed by the fallout of the insurance program, should the funds to pay insurers be drained. The fears were sustained by the Department of Health and Human Services ruling on final changes in the program. It asserted that indeed, if funds ran out, taxpayers would be on the hook for "full payments" to insurance companies.

"While the administration’s changes to the Risk Corridor provision protected the profits of insurance companies’ Obamacare-compliant plans, it was extremely detrimental to taxpayers," the new GOP report warned. "When government picks winners and losers in the market, it reduces competition and harms consumers. Congress should protect taxpayers and bring greater transparency to the premiums in the individual market by repealing Obamacare’s Risk Corridor program."

At least one GOP lawmaker is intervening to make changes to the Risk Corridor plan. U.S. Rep. Lance Leonard of New Jersey has introduced two bills this week, one that would require HHS to get all risk corridor funding from health insurers and a second bill that would eliminate the risk corridor program completely, the insurance website LifeHealthPro, reported. A hearing on those bills, HR 4406 and HR 5175, was held Monday.

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