Sen. Marco Rubio, R-Fla., has sent a letter to Republican congressional leaders urging them to take further action in upcoming spending legislation to "completely shield" taxpayers from a potential multibillion dollar bailout of insurers losing money through Obamacare.
"So far we've succeeded in stopping the Obama Administration from bailing out health insurance companies under ObamaCare, and it's critical that Congress once again stand with taxpayers to stop any taxpayer-funded bailout of health insurers from happening," Rubio wrote in the letter to House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, and other top congressional leaders on Tuesday.
Rubio's letter comes as the Republican presidential candidate is aiming to highlight his role in preventing a taxpayer-funded bailout of Obamacare insurers (so far) and ahead of a Dec. 11 deadline for lawmakers to pass a spending bill.
At issue is a provision within the law known as the risk corridors program. Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims.
The idea was to provide training wheels to insurers in the first years of Obamacare's implementation, and to take away any incentive for insurers to cherry pick only the healthiest customers. But in practice, it has the potential to turn into an open-ended taxpayer bailout in the event of industry-wide losses, which Obamacare is seeing now.
Back in 2014, Rubio played a leading role in pushing Republicans to block any bailout. Last year's spending bill included a provision that limited the program, requiring the Department of Health and Human Services to pay out only from the pool of money collected, rather than supplementing it with other sources of government funding. President Obama signed that bill.
Since then, Obamacare insurers have been racking up losses as they struggle to enroll enough healthy customers to offset the cost of covering sicker enrollees with higher medical costs. For the 2014 benefit year, insurers losing more than expected asked for $2.87 billion in government payments through the risk corridors program, but HHS only collected $362 million from insurers performing better than expected.
The industry has been lobbying aggressively for more money, and HHS responded last week promising insurers that it would attempt to "explore other sources of funding" for the program and that it viewed bailing out insurers as an "obligation" of the federal government.
Rubio, noting this development, is pushing for further action in the upcoming "omnibus" spending bill to prevent any bailouts from taking hold in future fiscal years.
"If the only way ObamaCare can continue is for taxpayers to bail out health insurers that lose money because of it, that's as good an indication as any that the whole law should be repealed and replaced," Rubio wrote to GOP leaders. "It is our responsibility to completely shield the U.S. taxpayer from a deal in the Omnibus that might reimburse health insurers retroactively for these losses or any other future losses. The best way to do this is to include the language in the Omnibus that we have already used twice to prevent a taxpayer-funded bailout."
Full text of the letter below:
Dear Mr. Speaker, Majority Leader McConnell, Majority Leader McCarthy, Chairman Cochran, and Chairman Rogers:
It is my firm belief that taxpayers should never be required to bail out health insurance companies that lose money under ObamaCare. For this reason, Congress should repeal the risk corridors provision of ObamaCare as part of the Omnibus Appropriations bill the Senate is expected to consider next month.
The recently passed Continuing Resolution (CR) (P.L.114-53) included a provision that ensured the ObamaCare risk corridors did not expose the American taxpayer to a bailout of health insurance companies. This provision was also included in H.R.83, the Consolidated and Further Continuing Appropriations Act, 2015 (P.L.113-235) in December of 2014:
"None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transferred from other accounts funded by this Act to the ''Centers for Medicare and Medicaid Services—Program Management'' account, may be used for payments under section 1342(b)(1) of Public Law 111–148 (relating to risk corridors)."
On October, 1, 2015, Health and Human Services (HHS) officials announced that health insurers will be paid $362 million from the ObamaCare risk corridor program, despite requesting $2.9 billion in payments. The action Congress took on the CR has saved the American taxpayer $2.5 billion.
Let's be clear: the reason these health insurance companies are enduring a financial loss is that ObamaCare is a disastrous law. It broke the promise to lower health insurance premiums and allow Americans to keep their health care. Now the very architects of this law are attempting to place taxpayers on the hook.
On October 1, 2015, Marilyn B. Tavenner, the former CMS administrator who was in charge of the rollout of HealthCare.Gov, and who is now CEO of America's Health Insurance Plans, said, "Stable, affordable coverage for consumers depends on adequate funding of the risk corridor program. It's essential that Congress and CMO act to ensure the program works as designed and consumers are protected." Health insurance companies and their allies in the federal government are already mounting a lobbying effort to sneak in a truly epic earmark in any upcoming must-pass legislation: a taxpayer-funded bailout of health insurance companies through funding for Obama's risk corridor program.
Furthermore, on November 19, 2015, the Centers for Medicare and Medicaid Services released a memo reaffirming its hope to pay back health insurers under the risk corridors program if a company has outstanding claims.
So far we've succeeded in stopping the Obama Administration from bailing out health insurance companies under ObamaCare, and it's critical that Congress once again stand with taxpayers to stop any taxpayer-funded bailout of health insurers from happening.
If the only way ObamaCare can continue is for taxpayers to bail out health insurers that lose money because of it, that's as good an indication as any that the whole law should be repealed and replaced. It is our responsibility to completely shield the U.S. taxpayer from a deal in the Omnibus that might reimburse health insurers retroactively for these losses or any other future losses. The best way to do this is to include the language in the Omnibus that we have already used twice to prevent a taxpayer-funded bailout.