Last week, Moody’s rating agency lowered the outlook for health insurers from stable to negative, blaming Obamacare. Few Americans will shed tears for insurance companies. But the Moody’s announcement is a warning sign to taxpayers. They’ll be getting clobbered. Section 1342 of the Affordable Care Act forces taxpayers to make insurers whole for most of the losses incurred selling Obamacare exchange plans through 2016. The bailout is designed to conceal the failure of the president’s signature health law until he is out of office.
No one in the Obama administration talked up the advantages of bailing out insurers. It was kept under wraps until the fall of 2013. That’s when five to six million health plans were canceled because they didn’t comply with Obamacare’s one-size-fits-all-coverage requirements effective January 1, 2014. Insurers developed new plans, as the health law required, set premiums (generally higher) and sent out notices canceling the old plans.