In an attempt to salvage the failed launch of the healthcare law, President Obama is planning an event at the White House in which he will ask hand-picked Americans to go on display to illustrate the alleged benefits of the healthcare law. And in case that does not do a sufficient job of undoing the damage that the healthcare law has done to Obama’s reputation, the White House is laying out plans to bail out insurance companies to help offset the loss of revenue and profit that the industry is experiencing under ObamaCare.
The White House is turning to a rather hidden provision in the healthcare law to prepare a bailout that the administration hopes will help address the industry’s outrage over the administrative failures.
Townhall reported, “A ‘risk corridor’ provision in Obamacare allows the federal government to give health insurers a taxpayer bailout if the cost of providing care for those insured through Obamacare is higher than insurers originally estimated when they first set premium prices.”
Federal regulations originally allowed insurers access to bailout funds only after they spend $60,000 on an individual, but on Monday, the Department of Health and Human Services introduced new regulations lowering the limit to $45,000.
The Department of Health and Human Services has the power to use taxpayer money to reimburse insurance companies up to 80 percent of their additional cost in the first three years of the law’s existence. Americans for Prosperity’s website explained, “If the cost of insuring individuals under the PPACA is 3% higher than estimated, insurance companies receive a 50% taxpayer reimbursement of the difference. If the cost of the ACA is 8% higher than estimated, which is a significantly more likely outcome, insurance companies receive an 80% taxpayer reimbursement. This bailout of insurance companies could end up costing taxpayers billions of dollars.”
In the notice published Monday in the Federal Register, the Obama administration acknowledges that insurers have valid concerns when they observe that they may be saddled with sicker customers that cost more money in the new insurance exchanges because healthier Americans will likely be staying on their existing health plans for another year.
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