“First order of business for the returning Congress,” Charles Krauthammer writes, “The No Bailout for Insurance Companies Act of 2014:”
Make it one line long: “Sections 1341 and 1342 of the Affordable Care Act are hereby repealed.”
End of bill. End of bailout. End of story.
Why do we need it? On Dec. 18, the chairman of the Council of Economic Advisers was asked what was the administration’s Plan B if, because of adverse selection (enrolling too few young and healthies), the insurance companies face financial difficulty.
Jason Furman wouldn’t bite. “There’s a Plan A,” he replied. Enroll the young.
But of course there’s a Plan B. It’s a government bailout.
Administration officials can’t say it for political reasons. And they don’t have to say it because it’s already in the Affordable Care Act, buried deep.
First, Section 1341, the “reinsurance” fund collected from insurers and self-insuring employers at a nifty $63 a head. (Who do you think the cost is passed on to?) This yields about $20 billion over three years to cover losses.
Never heard of these? That’s the beauty of passing a bill of such monstrous length. You can insert a chicken soup recipe and no one will notice.
Nancy Pelosi was right: We’d have to pass the damn thing to know what’s in it. Well, now we have and now we know.
As Jonah Goldberg wrote last month, “When asked how he silenced opponents in the health industry during his successful effort to socialize medicine, Aneurin Bevan, creator of the British National Health Service, responded, ‘I stuffed their mouths with gold.'” For those same reasons, American insurers had few qualms about being willing partners for the Obama administration, despite knowing, as Jonah goes on to note, “if the architects of Obamacare had their way, the insurers would have been in even worse shape today:”
The original plan was for a “public option” that would have, over time, undercut the private insurance market to the point where single-payer seemed like the only rational way to go. If it weren’t for then-senator Joe Lieberman’s insistence that the provision be scrapped, DeMuth writes, “Obamacare’s troubles would today be leading smoothly to the expansion of direct federal health insurance to pick up millions of canceled policies and undercut rate increases on terms no private firm could match.”
In other words, the insurers knew the administration never had their best interests at heart, but got in bed with it anyway.
Articulating my sympathy for the insurance companies is difficult without the accompaniment of the world’s smallest violin. But, still, I have to wonder, do those running these firms have no backbone whatsoever? I understand that the insurance companies have been consolidating into de facto utilities for decades. But they at least once mustered some passion for defending their status as private enterprises. Sure, they have obligations to shareholders, but their obligations do not end there. Can’t one of them resign on principle and speak up? Or are their mouths so stuffed with gold that they couldn’t get the words out even if they tried?
But Krauthammer’s right — there should be no taxpayer bailout of those who chose to voluntarily engage in a corporatist partnership with the Obama administration. As a great philosopher once said:
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(Via Janie Johnson.)