Gruber Is Also Wrong On Policy – Forbes

November 13, 2014

MIT economist Jonathan Gruber is in the news again with his comments about how the drafters of ObamaCare used Americans’ ignorance about the complexities of tax law to impose a new tax on high-cost health insurance.

In a speech at the University of Rhode Island in November 2012, Gruber said: “…we just tax insurance companies, they pass on higher prices that offsets the tax break we get into being the same thing. It’s a very clever basic exploitation of the lack of economic understanding of the American voter.”

Gruber had bragged about the construction of the so-called Cadillac tax on high cost health plans in an earlier Washington Post op-ed published before the law passed.  My colleague John Hoff wrote a post at the time about the tortured construction of the tax and why Gruber was wrong to claim that experts nearly universally support it.

via Gruber Is Also Wrong On Policy – Forbes.

Emails Show Cozy Government-Insurer Alliance, Expectation of Bailout | The Weekly Standard

July 29, 2014

Publicly, President Obama loves to demonize insurance companies.  But behind the scenes, Big Government and Big Insurance maintain a cozy alliance that the Obama administration actively nourishes, often at taxpayer expense.  Indeed, as emails recently obtained by the House Oversight Committee show, Big Government and Big Insurance have worked together to promote Obamacare.  They’ve also worked together to make sure taxpayers will help bail out insurance companies who lose money selling insurance under Obamacare — that is, unless Republicans stop this from happening.  Moreover, Obama senior advisor Valerie Jarrett is among the prominent White House officials who’ve been in the middle of this collaboration between insurers and the administration — between those driven by the profit motive and those driven by the power motive.

via Emails Show Cozy Government-Insurer Alliance, Expectation of Bailout | The Weekly Standard.

A No-Brainer for the House GOP | The Weekly Standard

July 19, 2014

Well, there’s a way for congressional Republicans to go after Obamacare, cronyism, and the Democrats’ assertion that the GOP is in league with health insurers, all at once: by repealing Obamacare’s risk-corridor bailout. And after overcoming some internal resistance from don’t-rock-the-corporate-boat Beltway Republicans, it looks as if the House GOP is going to move in this direction. If they do—and if they were also to refuse to reauthorize the Export-Import Bank and were to move to reverse President Obama’s failed amnesty policies—Republicans could legitimately make the case this fall that they stand with Main Street America.

Obamacare’s risk-corridor program is a way of shifting risk from insurance companies to taxpayers—of putting the latter on the hook if the former lose money. The risk corridors’ existence incentivizes insurers to lowball their prices, since they know taxpayers will help cover their losses. It’s bad policy, and it’s unpopular. Recent polling by McLaughlin & Associates, commissioned by the 2017 Project, asked, “If private insurance companies lose money selling health insurance under Obamacare, should taxpayers help cover their losses?” Only 10 percent of respondents said yes; 81 percent said no. Yet, absent congressional action, that is exactly what’s poised to happen.

via A No-Brainer for the House GOP | The Weekly Standard.

The White House Is Bribing Health Insurance Companies

July 15, 2014

Hidden in the midst of a 436 page regulatory update, and written in pure bureaucratese, the Department of Health and Human Services asked that insurance companies limit the looming premium increases for 2015 health plans. But don’t worry, HHS hinted: we’ll bail you out on the taxpayer’s dime if you lose money.No wonder there wasn’t a press release. The White House is playing politics with Americans’ health care—and they’re bribing health insurance companies to play along.The administration’s intention is clear: Salvage the 2014 midterm elections. Typically, insurance companies release their premium rates between summer and early fall—i.e., right before voters cast their ballots in November. If premiums skyrocket—which looks increasingly likely—then voters won’t look too kindly on Senators and Representatives who voted for Obamacare and created this problem.

via The White House Is Bribing Health Insurance Companies.

Obamacare’s Prognosis Grows Dimmer – Bloomberg View

June 26, 2014

The data portend a vigorous debate over the “risk corridors” program, which is one of three mechanisms in the law designed to give insurers incentives to continue to participate in its exchanges even if they are at risk of significant financial losses. Some Republicans, particularly Senator Marco Rubio of Florida, Senator Jeff Sessions of Alabama and Representative Fred Upton of Michigan, have decried this program as an insurer bailout.The premise behind the risk corridors is that the financial winners in the Obamacare exchanges would compensate the financial losers such that the flow of money would make the system self-sustaining. What may not have been anticipated was what would occur if the financial losers the sicker enrollees far outpaced the financial winners the healthier ones.

via Obamacare’s Prognosis Grows Dimmer – Bloomberg View.

Young Obamacare enrollees more likely to have serious health problems – Health – AEI

June 25, 2014

The success of Obamacare always rested on getting enough “young invincibles” to enroll on the exchanges. Since the scheme bars health plans from pricing their insurance policies to the actual risk, Washington needs a lopsided share of cheaper young people paying too much in order to subsidize older people who are paying too little.

As many people expected, not enough young folks are signing up to pay the high premiums. But the structural problem could run much deeper. The young people who are enrolling also tend to have more serious and costly medical problems.

In short, Obamacare’s young enrollees aren’t invincible enough to underwrite the law’s delicate scheme.

via Young Obamacare enrollees more likely to have serious health problems – Health – AEI.

Cronyism and Coercion | The Weekly Standard

June 20, 2014

Obamacare’s risk-corridor program is serving as a slush fund for President Obama. He is using that fund to placate his insurance company allies whom he double-crossed. After Obama declared last fall that insurance policies banned by Obamacare would be unbanned by presidential proclamation, insurers were understandably alarmed. Obama’s lawless decree meant that millions of people who already had insurance—and who were likely to be healthier on the whole than those who didn’t—would not be forced into the Obamacare exchanges after all. His decree, therefore, likely made the exchanges’ risk pools even worse.Insurers registered their concern, and Obama responded by changing the rules on the risk-corridor program so that more money would flow insurers’ way. The Congressional Budget Office estimates that the administration’s rule change was worth $8 billion to insurance companies. The risk corridors that were once projected to generate $8 billion in revenue for the government are now projected to be budget-neutral. But that revenue was being counted on to help offset the cost of Obamacare, which means that according to CBO scoring the insurers have now effectively received an $8 billion tax break for which the general taxpayer is on the hook.

via Cronyism and Coercion | The Weekly Standard.


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