Heritage Action on Tuesday called on Congress to resist the Democratic push to pass legislation to save Obamacare in the lame duck session, and said the healthcare law is about to collapse under its own weight.
"There is widespread agreement that Obamacare is on the verge of collapse, and while that should prompt calls for full repeal, the reality is that many in Washington are instead contemplating how the law can be propped up," the group said in a Tuesday morning memo. Heritage Action is the lobbying arm of the conservative Heritage Foundation.
As a first step, the group recommended that Congress do nothing about the pending expiration of Obamacare's transitional reinsurance program and the risk corridors program. Both programs expire this year.
The reinsurance program requires insurers to pay an "assessment" to the federal government, which is used to help subsidize higher risk people under Obamacare. But the government has not collected nearly as much money as it expected, and with subsidized coverage still in high demand, the program could be in the red soon.
"[T]he collections are less than expected — so taxpayers will be on the hook to make up the ever-growing difference," Heritage Action warned. "To prevent additional, and higher than expected, payouts at the expense of taxpayers, Congress must simply allow the program to expire as scheduled."
The risk corridors program was meant to distribute money from profitable insurers to unprofitable insurers. But again, this program has not collected as much as anticipated, and conservatives fear Democrats will look to bail out the insurers somehow.
"In fiscal year 2014, insurers with losses submitted $2.87 billion in claims," the group said. "However, because of Obamacare's failure, HHS only collected $362 million from insurers with gains. HHS plans to make up the difference by robbing the taxpayers to pay the insurance companies."
Heritage Action said Congress should again take no action, except to fight against a unilateral effort by the Obama administration to bail out insurers.
The group also recommended another step to ensure taxpayers are compensated for the "assessments" under the reinsurance program. Under the law, the Department of Health and Human Services was required to pay $5 billion back to the Treasury, but this has not happened.
Heritage Action said Congress should penalize HHS for this failure by cutting its general management fund by 50 percent until all the money is repaid.
Finally, the group said Congress needs to act to cut off any "backdoor" payments the Obama administration might try to make to insurance companies. Some Republicans fear the government might take the money from the "Judgment Fund," which is used to pay settlements in cases the government loses.
"Congress should take legislative action before the end of the year to cut off access to any funding stream, like the Judgment Fund, that HHS may try to use to funnel money to the insurers, beyond what they have collected from the insurers themselves, for claims made under either of these risk mitigation programs," Heritage Action said.