Wednesday, October 22, 2014

Insurers and CMS Negotiate an Escape Clause Foreseeing the Possible Collapse Obamacare in 2015

Insurers who participate in the PPACA Exchanges must sign an annual agreement with CMS.  The 2015 version of the contract with the 30+ federally facilitated Exchanges contains some interesting language.

Insurers, clearly worried that the Halbig case could be taken up by the Supreme Court, have negotiated an out clause and the federal government has agreed.  If the taxpayer-funded premium reduction handouts are invalidated during 2015 (which absolutely has become a reasonable possibility) insurers can opt out of their 2015 contracts.  I.e., insurers can bail out and the federal Exchanges would quickly crumble. 

It certainly could be an interesting year.  

Here is the exact language on page 6 of the linked pdf:  

Yeah, its ridiculously laden with acronyms.  Translation guide: 
  • QHPI means an Issuer that provides Health Insurance Coverage through QHPs (Qualified Health Plans) offered through the FFE.  
  • FFE means Federally Facilitated Exchange. 
  • APTCs means Advanced Payments of the Premium Tax Credit.  
  • CSRs means Cost Sharing Reductions. 
  • CMS means The Centers for Medicare and Medicaid Services. 
Quite simply this proves that the insurance industry believes that the Halbig, King, Indiana or Oklahoma case(s) could successfully kill the federal subsidies.  It also proves that those same insurers agree Obamacare is unworkable without the massive taxpayer handouts.  

Hat tip to Health Reform GPS for the pointer.