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November 15, 2013

Oh, My: Rubio Wants to Repeal Obamacare's Pre-Planned Bailouts for Insurance Companies

I guess when I said that Republicans have to make the insurance companies fear them more than they fear Obama, Republicans were already thinking along those lines.

Make the Democrats vote to affirm each and every egregious and unpopular part of this bill.

Make them own it, until they beg us to let them repeal it.

Nutshell version: An insurer who’s offering a plan on the ObamaCare exchange sends a cost projection for that plan to HHS. If it comes in a bit under cost, they cut a check to HHS for the difference; if it comes in a bit over cost, HHS cuts them a check to make up the shortfall. It’s a way for insurers to spread the risk of cost miscalculations among themselves. Adrianna McIntyre, the economist who inspired Freddoso’s post, calls it “insurance for the insurers.” So far, so good. Problem is, there’s no cap on losses that HHS might be forced to cover if lots and lots of individual plans end up costing way more than the insurers projected. If a plan’s actual cost exceeds 103 percent of the projection, Uncle Sam covers half of the overrun; if actual cost exceeds 108 percent of the projection, Uncle Sam covers 80 percent.

This was of course a bribe to insurance companies, to get them to sign on to Obamacare. It's not that it put money in their pockets, exactly; but it did indemnify them against Obamacare losses.

Hm. Just like the President guaranteed the public they'd also be indemnified against harms caused by Obamacare.

However, unlike the promise Obama made to citizens, which he never intended to keep, Obama does intend to keep this promise to insurers -- "If you like your profits, you can keep your profits."

But now Rubio wants to put insurers in the same place as citizens -- fully exposed to the wrecking-ball harms of Obamacare.

I'm in favor of it. We need a crystallization of opinion on this. I am tired of delays. We need the thing wiped off the books, and if that requires nearly bankrupting insurance companies until the exit the markets entirely, then we'll just have to do that.

By the way, a good point from health care executive Bob Laszewski.

Megyn Kelly teed up Laszewski with a series of video clips of various White House surrogates suggesting the cancellation letters are a merely a business decision being made by insurance companies. But as Laszewski pointed out, that claim is completely undercut by the President's offer of a "fix."

"If the insurance companies didn't have to cancel people then why did the President give a press conference and announce that insurance companies don't have to cancel people?" Laszewski asked. "The administration just changed the rules so the insurance companies don't have to cancel people" he continued, adding "Well, I guess they had to before then, didn't they Megyn?"

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posted by Ace at 02:25 PM

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