I’m sure everyone who read the 2,700 page Affordable Care Act is familiar with the “risk corridor and reinsurance program,” right? Of course you have. That’s the provision that gives the Administration absolute discretion to compensate the insurance companies for any losses they suffer due to Obamacare.
Now, Republicans are fighting back against this provision, which allows the Administration to effectively bail out the insurance industries that Obamacare ruined.
So, as one would expect, the insurance companies are gearing up to fight back! Buzzfeed has the report:
Blue Cross Blue Shield Association CEO Scott Serota asks members to lobby the Hill against repeal of the “risk corridor and reinsurance program” that Republicans believe is an insurance company bailout. The repeal “jeopardizes the entire private health insurance market and will ultimately lead to a single-payer system,” he writes.
Seriously. If the insurance industry is not bailed out, Obamacare will collapse and we will be stuck with single payer.
In attached talking points, seemingly directed at Republican lawmakers opposed to risk corridors and reinsurance, BCBSA is asking members to argue that eliminating the risk corridors will lead to the eventual downfall of Obamacare and lead to a single-payer system: “It jeopardizes the entire private health insurance market and will ultimately lead to a single-payer system. Furthermore, it will close the door to pro-competitive health care reform alternatives.”
One bolded talking point, “use with appropriate audiences only,” charges that “eliminating these programs will result in massive premium increases and could cause private insurers to become insolvent.” In Serota’s email, however, this point is intended for Democrats only.
This would be comical if it wasn’t so sad. Now the insurance executives are trying to convince the Republicans *not* to stop their bailout.
“We are becoming increasingly concerned about momentum that is quickly building among some leading conservatives for elimination of the risk corridor and reinsurance programs,” Serota wrote.
Serota specifically cited several high-profile bills introduced in the House and Senate to repeal the programs and a column by Charles Krauthammer calling for immediate congressional action on the bills.
Serota told members that he would be meeting with Majority Leader Eric Cantor and Speaker John Boehner next week to try to convince them repeal of the risk corridors not be “part of their ACA strategy.”
Here are the highlights of the memo:
Eliminating these programs will result in massive premium increases and could cause private insurers to become insolvent. [ Use with appropriate audiences only.It is very misleading to characterize the program as a bailout of insurance companies. Forexample, the risk corridor program not only protects insurance companies from losses, italso requires insurers to pay the government if they make too much money.In the not-so-long run, eliminating risk corridors and reinsurance doesn’t just lead to thefailure of the ACA. It jeopardizes the entire private health insurance market and willultimately lead to a single-payer system
The havoc the ACA is wreaking is, well, unpreceented. If they are already talking about single payer two weeks after the thing launched, we are screwed. I don’t know if I will ever make it to a third book. People keep asking me if Obamacare can be repealed. The answer may be no. Will it implode? Maybe.
I was talking about this with a colleague recently, and he said the insurance companies made their deal with the devil, let them pay the consequences. Of course, if they fail, then we are primed for single payer.
Update: Here is an excerpt from Unprecedented, where I talk about how Obamacare will eventually lead to the collapse of the insurance market, and pave the way for single payer. I expected this to take a generation. Not a few months.
If the ACA continues to result in higher premiums and the consequent price controls aimed at controlling these rates nudge insurers to exit the market (insurers are already opting out of California’s exchanges), the mandate may serve as a mere pit stop on the road to single-payer health care (what progressives wanted but did not get in 2009).
Here is the memo.