Published on TheHill.com on January 14, 2014
One of the least publicized aspects of ObamaCare is its bailout of insurance companies. Far from warring against them, as Hillary Clinton did in 1993, the Obama program is their new best friend.
Robert Laszewski, a healthcare consultant, points out that ObamaCare is really a giant reinsurance program, capping the liability of health insurance companies. Under its provisions, the first $45,000 of payments to an insured patient come from the company’s coffers. The taxpayer, through the federal government, then obligingly will pick up 80 percent of the remainder.
In addition, insurance companies are to estimate their payouts during the coming 12 months every year. If they miss, or the costs are greater than they supposed, the feds will pick up 80 percent of the overage. It is a kind of cost-plus deal for insurance companies.
All told, insurance companies are to get $1 trillion in subsidies over the next 10 years, a staggering amount of tax money. They will make out far better than General Motors, defense contractors or any TARP recipient banks.
As the enrollment in Obama-Care continues, and it becomes apparent that participation by young people will fall far short of the 38 percent projection the law’s framers anticipated, this bailout becomes a matter of life and death for participating insurance companies. Current stats indicate about a quarter of the pool of ObamaCare customers are under the age of 30. One-third are in the dread 55-65 age group, the least healthy and most costly of the demographics covered by the program.
It’s becoming increasingly apparent that the healthcare reform program has nothing to do with covering the uninsured. Eighty percent of those covered were previously insured. They moved to ObamaCare only after their current policies were shot out from under them by Health Department-forced cancellations. Indeed, surveys indicate that only about one-quarter of the uninsured have any intention of ever entering the program.
Rather, the entire plan is a gambit to switch people from private sector insurance to government-dependent coverage. The goal is socialization, not expanded coverage.
As group policies, particularly for small employers, begin to face cancellation — either because the policies are deemed inadequate or because rate hikes make them unacceptable — the ranks of insurance refugees will mount. Millions more, rendered insurance-less through ObamaCare regulations, will flee to the makeshift healthcare refugee center HealthCare.gov has become.
And they won’t be happy about it.
The political fallout from the 5 million cancellations of individual policies over the past three months will be dwarfed by the storm that will arise as tens of millions find themselves denied the option of continuing the coverage they had and enjoyed. The mendacity of Obama’s claim that you can keep your healthcare plan, if you like it will be exposed ever more plainly to an ever larger group of Americans.
The fallout from ObamaCare will continue and will escalate — and not just from those who are canceled. Much of the anger will be vented by those who opted into the program and signed up for coverage.
We will particularly hear from insured people who face high deductibles before they see a dime of benefits. An estimated 80 percent of the enrollees are signing up for bronze or silver plans. Do they realize that they will have to pay almost $5,000 in deductibles (bronze) or $3,800 (silver) before they get any payouts? Probably not. But they are about to find out.
Those with insurance under ObamaCare are also about to find out how fraudulent is the president’s promise that they can keep their doctor or hospital. With many doctors refusing to participate in the program, the president cannot keep this promise.
When all this hits the fan, the political consequence for Obama and his Democratic allies will be horrific in 2014.
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