By Josh Withrow
A basic concept of health insurance is that payments to patients come from a common pool of money – meaning that every customer pays in. When too many people in the pool need payouts, everyone’s premium goes up to compensate. While crafting their health care takeover, the ObamaCare team realized that if insurers were to go along with being forced to cover millions of new, less-healthy patients, their response would be to increase premiums across the board to compensate. Thus, they built several components into the law which are intended to keep insurers from taking “undue losses”: reinsurance, risk adjustment, and risk corridors.
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The administration issued a rule which stated that if insurance companies’ losses exceeded the amount provided by the risk corridors under the law, the government would pay the rest – a direct federal bailout of the insurers. Since Congress would not authorize any new spending to cover the cost, the government declared that they would collect “user fees” instead. Regardless of whether these “fees” are legal (and that’s debatable), it is outrageous that the administration is directly using taxpayer dollars to essentially bribe the insurers into hiding the true cost of ObamaCare to consumers. And these user fees, of course, will be passed on to consumers – if you have insurance, you will pay for this bailout.
The cost to taxpayers for this little political maneuver? A billion dollars, at least, according to a House Oversight subcommittee, and it could very well cost more.
The bailout won’t just be a one-year deal. ObamaCare’s very design incentivizes the least healthy among the uninsured to sign up, and the young healthy population to find a way around it. In order to keep insurers in the game, the administration may well be forced to keep the risk corridors, their supposedly temporary automatic bailout, in force indefinitely.
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More:
http://www.freedomworks.org/content/...nies-your-dime
Originally Posted by Natural Citizen
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