As I explained during the health care legislative fight, the insurance companies were playing a double game, spending big to oppose the so-called public option (a plan to stage an unlevel competition between a government-run insurance system and private competitors slated for extinction) while otherwise working enthusiastically to pass the bill that became Obamacare.
They love Obamacare because it sends hundreds of billions of dollars of subsidies their way and requires Americans to buy their products, whether they like it or not, under threat of a penalty tax. But the bargain also came with accepting a huge bureaucratic overlay that reduces insurance companies to something like regulated utilities. And that means their profits now depend on the bureaucrats.
Perhaps not surprisingly, we are already seeing the type of corruption that is typical of the cronyism that often develops in regulated industries.
A blockbuster new report from the House Oversight and Government Committee pulls back the curtain on recent changes to industry bailout programs embedded in Obamacare.
When President Obama caved to public pressure and reversed some of the mass cancelations of plans people liked and wanted to keep, it meant fewer healthy people in the Obamacare plans they otherwise would have been forced into. So the industry lobbyists began pleading for the administration to juice the law’s built in bailout programs.
Aetna lobbyist Peter Rubin sent an email referencing multiple meetings on the issue just two weeks before the administration significantly increased taxpayer exposure by increasing bailout payments.
That wasn’t good enough for CareFirst Blue Cross/Blue Shield CEO Chet Burrell. He wanted even bigger bailouts. Valerie Jarrett sent this response:
Alas, though she explored options to do more as aggressively as she could, the White House delivered 80 percent of the bailout increase BCBS was looking for, according to Jarrett. Burrell was appreciative, but indicated substantial rate increases were coming across the country and “it can’t be helped.”
How much are these bailouts going to cost you, American taxpayer? Too much, and already much more than before the insurance industry asked and received a big increase:
In effect, the big insurance companies who wrote this law, lobbied aggressively for it, coordinated messaging with the White House (there’s more on that in the report, too), and spent big on TV ads supporting it are now threatening to increase premiums even more if they can’t get bigger and bigger bailouts. Like having all those subsidized and mandated customers isn’t enough for them. It’s ridiculous.
Congress should therefore expeditiously pass Rep. Leonard Lance’s (R-N.J.) legislation requiring these so-called risk adjustment programs to spend no more than they take in from insurance companies themselves—rather than taking it from taxpayers.
Phil Kerpen is president of American Commitment.