From a press release:
Washington, D.C. – U.S. Senator Marco Rubio (R-FL) today commented on new evidence of the increasing likelihood of a taxpayer-funded bailout of health insurance companies under ObamaCare. This week, insurance companies began making material filings to the Securities and Exchange Commission (SEC) regarding projections for their ObamaCare risk pools.
Already, one company has disclosed that “as a result of the December 2013 federal and state regulatory changes allowing certain individuals to remain in their previously existing off-exchange health plans, the Company now expects the risk mix of members enrolling through the health insurance exchanges to be more adverse than previously expected.”
“American taxpayers should not be on the hook for bailing out health insurers, especially because ObamaCare is not working the way it was sold,” said Rubio. “Congress should take an ObamaCare bailout off the table by passing legislation I’ve introduced to repeal the so-called risk corridor provision under the law.
“If ObamaCare can only survive through a taxpayer bailout of insurers, it’s yet another clear sign that it can’t survive and isn’t worth saving,” he added.
Last year, Rubio introduced S.1726, The ObamaCare Taxpayer Bailout Prevention Act, a bill that would eliminate a provision of ObamaCare that allows for taxpayer-funded bailouts of insurance companies at the Obama Administration’s sole discretion.
Under ObamaCare’s section 1342, so-called risk corridors were established for the law’s first three years as a safety net for insurers who experience financial losses. Rubio’s bill would fully repeal the risk corridor provision, thereby ensuring that no bailout will occur under ObamaCare’s section 1342.
The big question: Is he right?
We probably won't know for another three or four months as more data comes in about the insurers' risk pools and the companies' expectations.
And, since risk corridors were built into the Affordable Care Act legislation, it's debateable about whether this is a "bailout," at least not in the sense of TARP, or the auto industry bailout. The word bailout implies an emergency spend for some unforeseen circumstance. Still, one man's bailout is another man's safety net.
Also, these payouts won't make insurers whole. So if it is a "bailout," it won't keep an insurer from going bankrupt.
-- with Daniel Chang