Omnibus Includes Lethal Rejection for Obamacare - The American Spectator | USA News and Politics
Omnibus Includes Lethal Rejection for Obamacare

Yes, yes. I know. Only a RINO or a (Trumphradites may insert preferred epithet for thinking Republicans here) would claim that the House omnibus spending bill contains anything conservatives can applaud. It does, nonetheless, include such a provision. As Ronald Reagan — who signed several omnibus bills himself — famously said, facts are stubborn things. And one of the most intransigent facts about this bill is that it imposes a deadly dose of fiscal restraint on Obamacare. It requires the law’s “risk corridor” program to remain budget neutral. This is far more dangerous to the “Affordable Care Act” than most observers realize.

Specifically, it thwarts the Obama administration’s plan to indiscriminately use taxpayer funds to revive Obamacare’s moribund insurance exchanges. These “marketplaces” are facing extinction because they have failed to hit their enrollment goals and the individuals who have signed up are far sicker, on average, than expected. Thus, insurers selling coverage through the exchanges are incurring unsustainable losses. Obamacare’s risk corridor program is a corporate redistribution scheme whereby the Department of Health and Human Services (HHS) would, in theory, use excess profits made by some insurers to cover losses incurred by others.

No one really believed that this would work. It was all too predictable that most insurers selling coverage through the exchanges would incur serious losses. Consequently, during negotiations leading up to last year’s spending bill, Senator Marco Rubio . led a successful effort to insert language that forbade HHS to use general appropriations or Medicare funding to finance the risk corridor program. This saved the taxpayers $2.5 billion. As the New York Times reports, “Losses were so steep that insurance-company requests for risk corridor payments were $2.9 billion, compared with only $362 million paid into the program by profitable plans.”

The budget neutral language is also included in this year’s much-maligned omnibus bill, and it has led to apocalyptic predictions by a variety of commentators. Marc Thiessen at the Washington Post, for example, describes the Rubio provision thus: “a poison pill that is killing Obamacare from within.” This is not an exaggeration. The restriction on using general funds, as the Times piece goes on to point out, means that HHS can pay “only 13 percent of what insurance companies were expecting to receive this year.” Faced with this kind of “assistance” from the risk corridor program, most major insurers will abandon the exchanges.

Indeed, some major insurers are already heading for the lifeboats. UnitedHealth Group announced last month that it “has pulled back on its marketing efforts for individual exchange products in 2016” and is mulling whether “it can continue to serve the public exchange markets in 2017.” And UnitedHealth is by no means the only major insurer to lose money in Obamacare’s “marketplaces.” Bloomberg reports, “Anthem and Aetna are two of the biggest players [in the exchanges]. Like UnitedHealth, neither has had financial success there — Aetna has said it’s losing money, while Anthem is making less than it would like.”

The shareholders of these two corporations will soon lose patience with Obamacare participation as they watch the value of their investments go south. Phrases like “losing money” and “making less than we would like” don’t make for enjoyable reading in a quarterly earnings report. And, according to a November report from the consulting firm McKinsey & Company, only 35 percent of the insurers participating in Obamacare made money in 2014. When the final 2015 figures come in they will further erode “confidence in the durability of President Obama’s signature health law,” as the Times phrases it in the piece quoted above.

So, even if its risk corridor restrictions were the only useful feature of the omnibus, one could argue that the damage done to Obamacare outweighs the bill’s admittedly numerous flaws. But it also delays implementation of the infamous HIT, medical device, and Cadillac taxes. Some conservatives claim that these delays will somehow make Obamacare’s future more secure, an odd argument coming from a group of people who have bitterly complained about these taxes for six years. In reality, it is “reform’s” supporters who should be worried about the implications of these delays in a post-Obama political environment. And they are.

The Hill reports, “Obamacare advocates are growing fearful that several key taxes frozen in Wednesday’s budget deal will never go into effect… they’re worried that the delay of these taxes, until after Obama leaves office, will ultimately lead to their demise.” This is a valid concern. Unless the GOP is dumb enough to bestow its presidential nomination on Donald Trump, whom Hillary would beat like dirty rug, these taxes are goners. This would certainly be true if Rubio gets the Republican nomination. Unlike the braying billionaire, the author of the risk corridor restrictions can win and would sign a full repeal bill.

David Catron
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David Catron is a recovering health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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