Every couple of days, a new revelation about the Affordable Care Act (ObamaCare) comes out that makes us wonder about the wisdom of the whole policy.
Yesterday, Sen. Marco Rubio (R-FL) wrote an op-ed piece in the Wall Street Journal that talks about "risk corridors" contained in the act. A "risk corridor" is a device that lets the federal government reimburse an insurance company for losses resulting from issuing policies through health care exchanges.
Originally intended to be a safety net for the first three years of the act, the administration decided last week that it would consider expanding the use of them because of the president's decision to let people keep their existing policies for another year.
Rubio said that deep in the Department of Health and Human Services news release about the president's decision was this little gem:
"Though this transitional policy was not anticipated by health insurance issuers when setting rates for 2014, the risk corridor program should help ameliorate unanticipated changes in premium revenue. We intend to explore ways to modify the risk corridor program final rules to provide additional assistance."
Rubio announced in his WSJ article that he would seek legislation to get rid of these "bailouts" of insurance companies.
It is common knowledge that citizens could qualify for subsidies in the form of tax credits if they purchased a plan through an exchange. But this was the first we had heard that the government is also on the hook to subsidize participating insurance companies.
It would make sense for those companies to put attractive (unprofitable) rates out there for the first three years to gain market share if they knew the government would underwrite any resulting losses.
But what happens to rates when those "risk corridors" disappear? Or is the plan for them to never disappear?
Either way, the current plan is for American taxpayers to subsidize health insurers. And that is just plain wrong.
* Editorials reflect the opinion of the publisher.