“I think this is one of the most effective things they’ve done so far in terms of trying to undermine the Affordable Care Act,” Tim Jost, a healthcare law professor at Washington and Lee University, said of Republicans in Congress. [The Hill]
It revolves around “risk corridors” that basically bail out insurance companies, shielding them from losses. Senator Rubio calls it a “taxpayer bailout,” which is sure to ring true in the hearts of many voters, not just on the right.
The Rubio letter sent to Republican leaders of the Senate and House seems to convey that he thinks he’s got the answer to “repeal and replace” the Affordable Care Act, aka Obamacare.
The risk corridors program was designed to be a temporary stopgap against high insurance claims during the first three years of the new federal program.
If an insurer had more expenses than it planned, the federal government would cover the remaining balance using cash collected from companies that paid out fewer claims than expected.
The program was almost certain to need extra money in the first few years, when there were fewer healthier customers signing up. But Rubio’s provision in 2014 severely limited any new spending by requiring the program to become budget neutral.
The damaging effects of the budget-neutral requirement became clear in October.
The Obama administration disclosed it could only afford to pay 13 cents of every dollar owed to the insurance companies — after insurers had already locked in their rates for the upcoming year.
“Obviously what happened was exactly what we thought would happen — there’d be an imbalance. Most of the companies lost money,” said Joseph Marinucci, a senior analyst with Standard & Poor.
“You have to be able to deal with unanticipated events, such as the legislation that would restrict the funding of its corridors,” he said.
Marco Rubio has been rising lately, grabbing foreign policy as his presidential platform. Rubio and his campaign team have showed a degree of maturity by not rising to the bait thrown at him. Rubio especially adept at handling Donald Trump’s tirades by laughing them off. What more could the establishment want than someone who also put into legislation the one thing that has even the insurer giant United Health Care thinking twice about being tied to ACA/Obamacare?
“Look, removing the risk corridors will make insurer participation less attractive,” Gruber said. “But the exchanges are robust and will continue to exist.” [Bloomberg]
This post has been updated.