Monday, June 23, 2014

If Current Obamacare Bailout Scheme is Insufficient, CMS Maintains It Can and Will Make up a NEW Fee to Soak Taxpayers

This is from Dr. Scott Gottlieb, writing at Forbes:   
... [CMS maintains that] if funding for the risk corridors [what's being referred to most often as 'insurer bailouts'] can’t be financed off the money that gets clawed away from profitable insurers (therefore allowing the entire scheme to remain budget neutral) then CMS has the authority, if not the intention to impose additional “user fees” on all health insurers to cover the higher losses experienced by the Obamacare plans. ... 
At issue is what’s being referred to as the “three R’s.” These are Obamacare policy constructs that are designed to offset losses that insurers will take as a result of the mostly older, and less healthy mix of patients that enrolled in the exchanges. 
These three R’s include: A reinsurance fund of about $25 billion (financed off a fee on commercial insurance plans) that compensate health plans that enroll a costlier pool of patients; “Risk corridors” that substantially limit insurance company losses by shifting these costs to taxpayers; and Risk adjustment that balances health plans that enroll a disproportionate share of costlier patients. 
The money drawn off the newly proposed user fees (tax) would be used to finance the risk corridors. This scheme is largely aimed at shifting money between insurers that lost excessive amounts of money, and those that were profitable. 
Problem is, almost everyone lost money. Few if any Obamacare plans had excess profits this year, owing to the rocky rollout. So there isn’t any money to shift around — absent, of course, some new cash infusion. That’s where the user fee comes into play....