Whatacoincidence!Keystatessettoannounce

What a coincidence! Key states set to announce premium rate increases for 2015

posted at 10:41 am on May 22, 2014 by Ed Morrissey

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Yesterday I noted that the Obama administration snuck the mechanism and $3.5 billion in funding for an insurer bailout, bypassing Congress and wheedling insurance companies to keep 2015 premiums low. The Hill’s report on the announcement dates for rate hikes explains the timing of this effort. Thirteen states will announce the newly approved rate plans for 2015 — including a handful of those Democrats desperately need to keep in the midterms:

Premiums are expected to go up in a majority of states, as they do every year, but the size of the increases could go a long way toward determining how much political damage Obama-Care inflicts on vulnerable Democratic lawmakers.

A survey by The Hill of state insurance commissioners found that news about ObamaCare premiums will hit nearly every week this summer, providing ample opportunity for Republicans to attack any significant premium hikes.

A slew of states will publish proposed prices in June, including Colorado and Louisiana — where the GOP is targeting Democratic Senate incumbents.

Others will wait until later in the season, including West Virginia and Arkansas. Sen. Mark Pryor (D-Ark.) voted for the Affordable Care Act in 2010, a fact that his opponent, Rep. Tom Cotton (R-Ark.), has repeatedly raised.

Sen. Kay Hagan (D-N.C.), a top GOP target, will see her state publish rates on Aug. 15 or later.

The need to get these regulatory changes in place now are rather obvious. Insurers who have experienced worse-than-expected demographics in their risk pools will have to substantially raise premiums in 2015 in order to counter the losses that they will incur from their new enrollees. These increases will get announced over the summer, which is bad enough for Democrats in the midterm elections, but will actually hit consumer eyeballs in an up-close-and-personal way in the fall, when open enrollment in both the individual and group markets take place. That will have consumers stunned and angry while marching to their polling stations, exactly what the White House fears most.

Rather than try to head that off with more happy talk, or with some “fixes” on ObamaCare that Democrats regularly endorse and never actually propose, the White House tried this threadbare workaround to sweeten the pot for insurers. This just shifts the costs from one channel to another, with consumers still bearing the load. By shifting it to consumers through the tax system, though, it makes the costs much more indirect and largely invisible, even though it’s quite real.

It’s basically bribery to insurers, as Investors Business Daily’s editorial board writes:

Last Friday, the Obama administration quietly expanded an insurance industry bailout program that it publicly insisted never existed. In exchange, Obama wants a big political favor from insurers. …

Keep in mind that only a few weeks ago, White House officials were denying that any such bailout existed in ObamaCare. The “risk corridor” program at issue, a White House budget spokesman said in March, was merely a “safety valve for consumers and insurers” transitioning to a “brand new market.”

It was, the administration promised, there only to protect insurers temporarily, as a way to encourage them to join ObamaCare, and was just like the one used in the Medicare Part D drug benefit program.

Besides, they said, the ObamaCare risk corridor program would be self-financing, with overly profitable insurers paying in so money-losing ones could take out.

But in his latest budget, Obama proposed setting aside $5.5 billion for the program, just in case. The Times makes clear: Obama expects something big in return.

The expanded guarantee comes, the paper says, “as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall’s congressional elections.”

In short, Obama is offering the industry virtually unlimited taxpayer bailout money, in hopes that it will return the favor and avoid politically damaging rate hikes, at least until after November’s mid-term elections.

Ironically, the big driver of increasing health-care costs before ObamaCare was price-signal opacity. This attempt at bribing insurers to continue their loss-leader pricing into 2015 by promising a government payoff makes it clear that ObamaCare worsens that problem rather than helps resolve it. Instead of making price opaque for reasons of risk-pool management alone, now we have the added incentive for government to increase opacity for its own political purposes. And this time, we’ll be paying not just in cash, but in increasingly rationed health care.

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Tags: bailout, Barack Obama, corruption, insurers, midterms, ObamaCare, premiums, price signals

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NewWHregsprovideObamaCarebailoutfundingfor

New WH regs provide ObamaCare bailout funding for insurers – while bypassing Congress

posted at 2:41 pm on May 21, 2014 by Ed Morrissey

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Their lips say no no no, but their regulations keep saying yes. Despite denials that the Obama administration intends to spend massive amounts of taxpayer dollars to rescue insurers from losses caused by ObamaCare mandates, the LA Times’ Noah Levey reports that new regulations earmark “billions” of dollars in federal funds to indemnify the indemnifiers. The White House plans to use the funds to entice insurers into keeping premium increases low:

The Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money.

The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall’s congressional elections.

Administration officials for months have denied charges by opponents that they plan a “bailout” for insurance companies providing coverage under the healthcare law. …

But the change in regulations essentially provides insurers with another backup: If they keep rate increases modest over the next couple of years but lose money, the administration will tap federal funds as needed to cover shortfalls.

In other words, it’s a payoff to perpetrate a fraud. The White House has long argued that their takeover of the health-insurance industry would “bend the cost curve downward,” but instead, premiums have spiked upward dramatically — as have deductibles, a powerful one-two punch to the gut of consumers. That threatens the political prospects of Democrats in the midterms, especially since the next round of premium increases will hit right before the election.

In that context, the new regulations make it clear that the White House intends to use its regulatory authority to provide a false sense of relative affordability, or at least disaster avoidance. It’s also clear that they want to avoid having to ask Congress for the money, which my colleague Conn Carroll thought would be necessary to proceed:

But there is just one hitch: according to a January 2014 Congressional Research Service memo, it would be illegal for Obama to make risk corridor payments to insurance companies without an explicit appropriation from Congress.

This means that Republicans do not need Rubio’s legislation to stop a taxpayer bailout. It is already illegal for Obama to use taxpayer funds to pay insurance companies through the risk corridor program.

Unfortunately, from his war in Libya to his Deferred Action for Childhood Arrivals (DACA) program, Obama has a well established history of flagrantly breaking federal law. And progressive activists are already urging Obama to ignore federal law and illegally bailout the insurance companies through the risk corridor program anyway.

If conservatives want to stop the illegal Obamacare insurance bailout before it starts they must start planning now. The current budget deal expires this September, just two months before Election Day. They must demand appropriations language explicitly banning any payments to insurance companies through the risk corridor program that exceed payments to the program.

If they don’t, then Republicans will have missed another huge opportunity to minimize Obamacare’s damage.

Looks like Rubio’s bill needs to move forward, and fast, if we’re going to avoid another federal-government bailout of the insurance industry, and the cover-up of the true costs of ObamaCare.

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Tags: bailout, cms, insurers, ObamaCare, regulations, risk corridors

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Obamaadmintoinsurers:Noworries,we’llfind

Obama admin to insurers: No worries, we’ll find “other sources of funding” for those risk corridors if need be

posted at 6:01 pm on May 16, 2014 by Erika Johnsen

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Just a small smackerel of potentially very costly ObamaCare regulatory minutiae for a Friday afternoon, you know — the usual. Via the ever-vigilant Philip Klein at the Washington Examiner, it appears that the Obama administration felt the need to reassure insurance-industry lobbyists that the “risk corridor,” a.k.a. bailout, provision included in the president’s crowning legislative achievement will without a doubt be there to catch them if and when they fall.

The risk corridors are designed to siphon money away from the insurance companies that find themselves doing well in the law’s first years and redistribute it to insurance companies that find themselves struggling to keep premiums down whilst making ends meet, and while the administration has been blithely assuring critics that the provision will absolutely be budget-neutral, that promise of neutrality has been raising alarm among insurers worried that there won’t be enough money there if they end up having to charge “unexpectedly” high premiums and they suddenly need cash — prompting the administration to announce that it will find “other sources of funding” if push comes to shove. How nice.

The news, buried in a 435-page regulatory filing by the Centers for Medicare and Medicaid Services, undermines prior assurances by the administration that the program would be budget-neutral. …

In revised final guidance, CMS reiterates the intention for the program to be budget-neutral. However, the regulations provide added reassurance to insurers.

“As we stated in the bulletin, we anticipate that risk corridors collections will be sufficient to pay for all risk corridors payments,” the CMS document reads. “That said, we appreciate that some commenters believe that there are uncertainties associated with rate setting, given their concerns that risk corridors collections may not be sufficient to fully fund risk corridors payments. In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers. In that event, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.”

As Peter Suderman points out at Reason, CMS doesn’t mention what those other sources of funding might be, and it certainly doesn’t seem like there are any currently available/appropriated “other sources of funding” for the risk corridor payments. If push does come to shove, I rather highly doubt Congress is going appropriate any, no matter how hard the administration intones that Republicans are intentionally sabotaging their otherwise awesome law. So… is this just an empty reassurance for insurers while the Obama administration is livin’ on a prayer that everything works out according to plan, or does the Obama administration have other extralegal ideas in mind, as they have for so many of ObamaCare’s other troubles? Either way, I don’t like it. Not one bit.

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Tags: bailout, insurance companies, Obama administration, ObamaCare, risk corridors

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GMreturnstobankruptcycourt postedat

GM returns to bankruptcy court

posted at 10:01 am on May 3, 2014 by Gabriel Malor

The former Government Motors returned to bankruptcy court yesterday with a plea to enforce the liability shield it constructed during its 2009 Chapter 11 bankruptcy proceedings. The embattled automaker wants the judge to rule that “New GM” cannot be held liable for economic losses related to its ignition switch recall:

New GM says it did not agree to take on liability for so-called economic loss claims like the ones it now faces, in which plaintiffs allege that their cars lost value due to the recall. The company wants [Judge] Gerber to endorse that position and declare that such lawsuits can only be brought against the Old GM shell.

Gerber said he wanted the case to move quickly, and called on the parties to agree on deadlines for filing briefs. “You can take the weekend off,” he told lawyers, but added that he expected a timetable early next week.

The Old GM shell, of course, has no net assets to speak of, having assumed numerous liabilities of the struggling automaker before bankruptcy proceedings. There are at least 59 potential class-action lawsuits in the works seeking economic loss damages, but to get them, they will have to unwind the liability shield somehow.

One way to do that would be to demonstrate that GM had committed fraud by concealing the ignition switch defect before the bankruptcy. Another potential avenue would be to establish that the bankruptcy shield had denied the plaintiffs due process by depriving them of their day in court now that the ignition switch defect has been made public.

The court proceedings mark the sixth ongoing probe of GM, following investigations launched by Congress, an undisclosed state attorney general, the U.S. Attorney’s office, the SEC, and the NHTSA. GM also has an internal probe trying to determine who knew or should have known about the problem that has claimed at least 13 lives and cost GM car owners millions of dollars.

Tags: auto bailout, bailout, bankruptcy, GM

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TaxpayerlossesonGMbailouthigherthanfirst

Taxpayer losses on GM bailout higher than first reported

posted at 6:01 pm on May 2, 2014 by Bruce McQuain

Not that anyone should be particularly surprised that the loss was bigger than first reported.  There seems to be a pattern to that.  Report bad news on a Friday afternoon news dump and then, months later, quietly amend the bad news to worse news.

In this case the news is that taxpayers got scalped for more than the government first claimed with GM:

The U.S. government posted a deeper loss than initially recorded on the General Motors bailout, according to a government report released today.

Taxpayers lost $11.2 billion on the GM bailout, up from $10.3 billion the Treasury Department estimated when it sold its last GM shares on Dec. 9.

A Treasury Department auditor said the government had written off an $826-million “administrative claim” tied to the GM bailout on March 20.

Goodness knows what the “administrative claim” consists of, but it was worth just south of a billion dollars.  And if I had to bet, I’d probably bet this isn’t the last write-off.

Of course one can legitimately wonder what GM learned from its bankruptcy, or perhaps it it is better to describe the process they went through as similar to bankruptcy only not bankruptcy, thanks to the taxpayer’s largess.  In fact none of the hard lessons that make companies that successfully emerge from bankruptcy do well afterward were learned.  And the administration had a vested interest is ensuring GM didn’t have to go through the real process of bankruptcy because that would have required that all current contracts be voided.  Their interest rested in a very powerful and influential interest group — unions.  And they went to extraordinary lengths to ensure the unions involved actually came out ahead.

So when the administration says…

“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Treasury spokesman Adam Hodge said.

…what they really mean is we did this to “help save union jobs and thereby the power and influence of a strictly Democrat interest group.”

This is an administration that has been pretty blatant about its focus on partisan politics and it’s willingness to use the power of government to help its side.

This was no different.  And, as usual, they were fine with using other people’s money to help their cause.

~McQ

Tags: bailout, GM

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Detroitcutsdealwithretiredfirstresponderson

Detroit cuts deal with retired first responders on pensions

posted at 9:21 am on April 16, 2014 by Ed Morrissey

A new agreement with the city of Detroit could potentially be a very big deal, at least politically. Trying to climb out from under a fiscal collapse, the city managers had to restructure the massive pensions to eliminate or at least greatly reduce the debt overhang — but cutting pensions to first responders was highly unpopular. City managers got those retirees on board with their restructuring plans by protecting their benefits while cutting those of others, essentially splitting the opposition, but there is a huge caveat involved (via Ron Fournier):

Detroit has reached a deal with some retired workers over pension benefits, but cut monthly payments for other former employees, in a move that could give a boost to the city’s plan to exit bankruptcy in October, officials said Tuesday.

According to tentative agreements, retired police officers and firefighters will continue to receive their pensions while those who do not work in public safety will have some of their benefits scrapped.

There will be a 4.5 percent cut and an elimination of the cost-of- living payments for the general fund pensioners, said Tina Basset, spokesperson for the fund.

The agreement will cover more than 20,000 retired workers in a city going through one of the largest public bankruptcies in U.S. history. Both the retirees, as well as current workers who qualify for a future pension, will be allowed to vote as creditors in the bankruptcy.

How will Detroit fund these pensions? That’s been the problem all along, and not just in Detroit. Across the US, cities and states have massive pension overhangs thanks to defined-benefit plans that never got properly funded, rather than defined-contribution plans that get funded up front. That’s a major part of the debt Detroit is attempting to shed, although not the only component of it.

The answer? Detroit needs a bailout, and they’re not getting it from the federal government. Or will it?

Michigan officials and President Barack Obama’s Administration are discussing a plan to free up $100 million in federal money to aid Detroit’s retired city workers, the Detroit Free Press reported on Tuesday.

Citing two people familiar with the talks, the newspaper said the talks were centered around federal money flowing to Michigan for blight removal. Under the plan, $100 million would be earmarked for Detroit, reducing the $500 million the city’s emergency manager, Kevyn Orr, plans to use to eliminate blight over the next 10 years.

The $100 million saved could then be used by Orr to ease pension cuts for retirees under the city’s plan to adjust its $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history, according to the report.

That’s the best the White House can do without going to Congress — and the House won’t rush to bail out Detroit with federal money, no matter what that might mean for Michigan Republicans.

In case that doesn’t work out, Detroit is trying to raise the money from the state of Michigan and private donations. This deal depends on raising nearly a billion dollars for its bailout, mainly to keep the city’s art collection. In order for that deal to go through, Detroit had to cut a deal with its pensioners to get the bankruptcy court on board:

If completed, the agreements with the pension funds and with a group representing 6,500 retired police officers and firefighters seemed certain to provide Detroit’s blueprint for paying off portions of its debt, known as a plan of adjustment, with a simpler journey through court. They may also offer a political boost to the city’s plan in the eyes of the public. In Detroit, retired municipal workers make about $19,000 a year on average from pension payments, pension fund officials say, and retired police officers and firefighters, who do not get Social Security benefits, receive about $32,000 a year.

Support from the pension funds and some retirees should also help solidify an unusual arrangement that has become a central piece of the city’s plan for starting over: Some $800 million from charitable foundations and the state would go to retiree pensions in an effort to retain the collection at the Detroit Institute of Arts. As a stipulation for that arrangement to go forward, though, retirees have to agree to the city’s overall plan. Still unanswered is whether state lawmakers will agree to contribute their share of the money, $350 million.

The deal will cut further into retiree health coverage than previously thought, however:

The city, which filed for bankruptcy last July, has proposed shedding nearly $10 billion in unfunded liabilities in the largest municipal bankruptcy ever. More than $3 billion of that gap was the estimated underfunding in pension funds.

The biggest liability on Detroit’s books is the cost of health care for current and future retirees and their families. And retirees are likely to see deeper cuts in their original coverage as part of this deal. Bankruptcy court mediators said Tuesday a fund would be established for retiree health care costs but did provide details.

Detroit’s officials claim that the renaissance is right around the corner. But that will only be true if the city learns from its lessons over the last 50-plus years and avoids the kind of irrational pension debt and cronyism that eventually sunk Motor City. And other cities and states had better learn those lessons, too — and fast.

Tags: bailout, bankruptcy, Detroit, firefighters, pensions, police

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WhiteHouseweighingplantoextendObamaCare’s“risk

White House weighing plan to extend ObamaCare’s “risk corridor,” i.e. bailout, program beyond 2016?

posted at 4:41 pm on February 18, 2014 by Allahpundit

The program’s supposed to be transitional, sunsetting in 2016 after the new exchanges have had a few years to launch and then stabilize.

Emphasis on “supposed to be.”

Industry insiders told the Washington Examiner a plan to extend the Affordable Care Act’s “risk corridors” are under discussion, but that administration officials have not made a final decision…

The Obama Administration is now weighing a plan to grant an additional three-year extension for non-complaint plans on the individual market. Such a move would prevent millions of people from losing their policies in the critical weeks and months before the 2014 election.

But it would also allow people on the individual market to keep non-compliant plans beyond the risk corridor’s 2016 expiration date, leaving health insurance companies serving the exchange vulnerable to financial losses as the more healthy customers continue to stay out of the exchanges.

Health insurance companies are looking for something in exchange for the three-year extension, which will make it much harder for them to sign up healthier and younger customers. Extending the risk corridor program is part of that conversation with the White House, industry sources said.

Remember back in November when Obama was eating truckloads of crap for breaking his “if you like your plan” promise? His solution was to let insurers “un-cancel” canceled plans — but lost in the hubbub at the time was the fact that he said he’d allow it for just one year. The obvious problem with that timeline is that it means this issue will bubble up again this fall, just in time for the midterms. New solution, then: Quietly allow insurers to keep un-canceled plans in effect past the midterms, for another three years. That’s how Obama just “solved” his little electoral problem with the employer mandate, isn’t it? Three-year extensions across the board, to minimize the damage to Democrats from his pet boondoggle in November. The problem is, because the old un-canceled plans are typically cheaper than expensive new “comprehensive” ObamaCare exchange plans, the extension means insurers are suddenly looking at less revenue than they counted on all the way through 2017. That’s where the “risk corridors” come in. Assuming the Examiner’s report is true, the White House is going to make this worth the industry’s while by extending the timeline for the bailout program too. Any losses they suffer in 2017 would, presumably, be partly offset by Uncle Sam even though the “risk corridor” is supposed to have terminated by then. Your tax dollars will buy insurers’ complicity in yet another illegal extension.

Bob Laszewski kinda sorta saw this coming, by the way. Last month he published a post arguing that, for all its faults, ObamaCare won’t cause a death spiral in the insurance industry anytime soon. The reason: The “risk corridor” program. Since Uncle Sam’s on the hook for any heavy losses in the industry, insurers are under no immediate pressure to raise premiums, the potential trigger of a death spiral. They can keep premiums artificially low — at least for a few years, until the “risk corridor” sunsets. Laszewski figured insurers would give the White House one more chance next year to get their act together on implementation and to start signing up the uninsured en masse; if they failed, he said, he expected companies to start parachuting out of the exchanges in 2016 before the “risk corridor” program expires. Which is to say, it’s very much in the White House’s interest to keep the program in effect, if it can, to keep insurers from abandoning the exchanges, especially if HHS has reason to think the risk pools they’re projecting will be less young and healthy than they had hoped. (And they do have such a reason at the moment.) The last thing Democrats need in a presidential election year is “Insurers give up on ObamaCare” headlines. Promise them some more sugar and you can avoid that. Maybe.

It seems naive at this point to ask whether the White House could extend the “risk corridor” unilaterally or whether that would be illegal. If they want to do it, they’ll do it regardless. O’s theory in issuing periodic delays or extensions for ObamaCare’s provisions is that, during the law’s transitional phase, he has some latitude legally to tweak implementation to make it go more smoothly. Extending the “risk corridors” past 2016, though, would mean the “transitional” phase had lasted past the end of his own presidency. It’s dubious, but it’s also in character. Here’s a question, though: Why would insurers leak this info now, when Marco Rubio’s trying to build support within the GOP for a bill to repeal the “risk corridor” program? He’s had little luck getting it on the leadership’s radar but his luck could change now that rumors are swirling that the bailout provisions might be extended into 2017 and beyond. The recent CBO numbers that found that the “risk corridor” could actually make money for taxpayers is a problem for the GOP, but (a) CBO’s numbers can be challenged and (b) CBO assumed that the “risk corridor” would be gone by 2016. Even if O decides to unilaterally extend the program, a new Republican Senate next year could join forces with some red-state Dems and Boehner’s House majority to repeal it, forcing Obama to either acquiesce in the repeal or to veto it and be seen as singlehandedly defending indefinite bailouts for insurers. Very strange that insurance industry sources, who stand to benefit, would be blabbing about this now.

Tags: adverse selection, bailout, insurance, insurers, laszewski, ObamaCare, risk corridor, risk pool

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Oof:BoehnerdropsKeystone/ObamaCaredebt-ceilingdemandsbecausehe

Oof: Boehner drops Keystone/ObamaCare debt-ceiling demands because he can’t find 218 votes

posted at 2:31 pm on February 5, 2014 by Allahpundit

He can’t find 218 Republicans to support approving the Keystone pipeline or repealing the “risk corridor,” i.e. bailout, provision in ObamaCare? What?

House Leadership has pulled the plug on proposals that would tie raising the debt ceiling with approval of the Keystone XL pipeline or eliminating the so-called risk corridors in the Affordable Care Act because these plans couldn’t reach 218 votes, according to a House aide with knowledge of the talks.

The debt limit has been suspended through Saturday, and the Treasury Department estimates it has enough extraordinary measures to last through the end of the month.

Tea partiers like Raul Labrador and Justin Amash grumbled yesterday that the leadership should go ahead and drop its “demands” now since we all know they’ll end up doing so before the debt ceiling is raised anyway. This is “theater,” said Amash. Why go through the motions when a clean debt-ceiling hike is a fait accompli? Some of them will vote no on a debt-ceiling hike no matter what sweeteners are attached, but especially if those sweeteners are a sham. More ominous is the possibility that it’s not tea partiers who are holding out but rather other Republicans who’ve had their arms twisted by business interests and the insurance industry muscle on K Street. If the “risk corridor” is repealed and insurers end up collectively over budget on their new ObamaCare exchange plans, they’d be on the hook for all of their losses without help from Uncle Sam. There may be some nucleus of House Republicans who are unwilling to put them in that position. And if there’s a nucleus opposed to that, maybe there’s a nucleus opposed to repealing O-Care if/when the House finally ends up in a position to make that happen.

There’s only one man who can save the “risk corridor” repeal effort now.

Sen. Marco Rubio, R-Fla., will make the case today that House Republicans can use the looming borrowing breach as leverage to start to unwind ObamaCare. Rubio, the lead proponent of a move to block insurance industry bailouts built into the law, will testify this morning before the House Oversight and Government Reform Committee about his plan. House Speaker John Boehner has said he is open to the idea of making the debt lift contingent on blocking potentially billions of dollars in handouts to insurance firms grappling with the fallout from ObamaCare. But Boehner won’t go ahead unless Republicans are united behind the plan. That’s why Rubio’s sales pitch today is a pretty big deal.

Rubio’s led the charge in Congress on this since November but has yet to see a vote on it. Getting it attached to a debt-ceiling hike in the House would be progress, sort of, in that it would force red-state Democrats to take a position. But it won’t pass, and then it’ll be summarily dumped before the inevitable clean debt-ceiling hike, just as Labrador and Amash predict. If Rubio’s serious about killing any potential bailouts, today’s the day to convince House Republicans that it’s worth going to the mat on it. It’s a test of his clout and his leadership, says Ben Domenech:

@allahpundit pic.twitter.com/dUPtb36m71

— Ben Domenech (@bdomenech) February 5, 2014

If Boehner can’t get to 218 on an essentially meaningless vote to repeal the “risk corridor,” for a bill that everyone knows will be stripped out, what are the odds that he or Rubio can convince 218 on a meaningful one?

Tags: bailout, boehner, debt ceiling, GOP, house, keystone, ObamaCare, risk corridor

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IstheGOPalreadygivinguponthe

Is the GOP already giving up on the next debt-ceiling standoff?

posted at 5:21 pm on January 29, 2014 by Allahpundit

Politico says yes, with good reason. The shining lesson of the debt-ceiling brinksmanship we’ve all watched over the past two and a half years is that Boehner and McConnell, for prudent reasons, simply will not allow the country to experience a technical default. The risk to the economy and to the GOP’s political hopes is too great. If that’s how they’ve approached the previous standoffs then of course they’re going to take the same approach in an election year when the party’s poised to recapture the Senate. The motto for Republican members of Congress in 2014 is “no sudden moves” — or at least it should be. As Bill Kristol noted the other day, there’s still a chance for a seriously self-sabotaging move on immigration.

Question, though. If the game plan next month is to fold and then sit back while ObamaCare’s foibles destroy the Democrats’ chances in November, why was Paul Ryan telling people in December after the much-derided budget deal to stay tuned for the GOP’s debt-ceiling demands? Why did Mitch McConnell say just three days ago that a clean debt-ceiling hike with no concessions for the GOP would be “irresponsible”? That’s an odd way to prepare your base for a letdown.

The most senior figures in the House Republican Conference are privately acknowledging that they will almost certainly have to pass what’s called a clean debt ceiling increase in the next few months, abandoning the central fight that has defined their three-year majority.

The reason for the shift in dynamics in this fight is clear. Congress has raised the debt limit twice in a row without drastic policy concessions from President Barack Obama and Senate Democrats, essentially ceding ground to Democrats. Obama and Senate Majority Leader Harry Reid (D-Nev.) are again ruling out negotiations over the nation’s borrowing limit, which would leave Republicans fighting against a unified Democratic front. It’s a tricky situation for the GOP in an election year: They would have to pass a clean debt limit bill or risk default…

“I’ve been saying publicly that once we voted for the budget, you knew that you were going to get a clean debt ceiling,” said conservative Rep. Raúl Labrador (R-Idaho), referring to the recently passed budget deal that he voted against. “The time to fight for spending cuts is when you’re talking about spending, not at debt ceiling time. So when people caved on the budget and caved on the [Ryan-Murray] agreement, it’s really hard for them to come back and say, ‘We don’t want to increase the debt ceiling’ when they’ve already voted for something that increases the debt.”

According to Politico, “At least a dozen Republican aides and lawmakers are highly skeptical they will be able to craft something that will attract the support of 217 GOP lawmakers.” Really? I can think of something that would, or should, get 217 Republican votes: Repeal the “risk corridor,” i.e. bailout, provisions for insurers in ObamaCare. Krauthammer’s been pushing that for weeks, in fact, as the ultimate poison pill for Obama and vulnerable Democratic incumbents in the Senate. If O and Harry Reid want a debt-ceiling hike, all they have to do is agree not to shovel taxpayer money at an industry that’s struggling to cope with the adverse selection chaos engineered by Obama’s big policy “achievement.” If I were Boehner, I’d call a presser today and announce that as my one and only demand, just to maximize the time for Republicans to push the “do Democrats support another bailout or don’t they?” message in the media before we hit the debt limit. Obama knows what it would mean for the insurance industry potentially if the risk corridor life raft is suddenly towed away, so he’ll force Reid to bottle the idea up. But that’s okay; the point here isn’t to force Reid to pass it, which the GOP can’t do, but merely to have that lone reasonable demand dangling out there in the public eye to show voters where the Democrats’ priorities are. If Boehner has to pass a clean debt hike at the eleventh hour, fine, but at least extract a pound of political flesh for it first. It’s a no-brainer as far as I can see. Why aren’t they doing it already?

Tags: bailout, boehner, clean, debt ceiling, hike, keystone, limit, mcconnell, Politico

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BlueCrossBlueShield:IfRepublicanskilla

Blue Cross Blue Shield: If Republicans kill a bailout for insurers under ObamaCare, it’ll lead to single-payer

posted at 4:01 pm on January 10, 2014 by Allahpundit

They’re nervous.

“We are becoming increasingly concerned about momentum that is quickly building among some leading conservatives for elimination of the risk corridor and reinsurance programs,” [Blue Cross Blue Shield Association CEO Scott] Serota wrote…

“Their efforts, along with growing support for repealing the risk corridor and reinsurance programs, could combine to create a perfect storm to, at a minimum, dissuade the Administration from modifying risk corridor program rules to provide increased funding in light of the recent ‘transitional policy’ allowing insurers to offer consumers the option to renew their 2013 health plans for 2014,” Serota wrote.

In attached talking points, seemingly directed at Republican lawmakers opposed to risk corridors and reinsurance, BCBSA is asking members to argue that eliminating the risk corridors will lead to the eventual downfall of Obamacare and lead to a single-payer system: “It jeopardizes the entire private health insurance market and will ultimately lead to a single-payer system. Furthermore, it will close the door to pro-competitive health care reform alternatives.”

One bolded talking point, “use with appropriate audiences only,” charges that “eliminating these programs will result in massive premium increases and could cause private insurers to become insolvent.” In Serota’s email, however, this point is intended for Democrats only.

You remember the “risk corridor” provisions, right? If a new ObamaCare plan comes in under budget, the insurer pays the difference between the actual cost and projected cost to HHS. If it comes in over budget, HHS pays the difference to the insurance. It’s a way for insurers to spread risk among the industry with HHS as middleman. (The bit in the excerpt about the White House modifying the rules for its new “transitional policy” is a reference to this.) Problem is, there’s no cap on how much HHS might need to pay out if lots and lots of plans come in over budget — a plausible scenario given the whispers from Humana about what it’s seeing among the demographic mix of ObamaCare enrollees so far. If too many plans have lopsided numbers of sick enrollees who need expensive treatments and few healthy ones to supply the revenue needed to offset that expense, HHS could be on the hook for the shortfall via a de facto bailout — unless Congress repeals the risk corridor provisions, in which case the insurers will be stuck with the bill. How many of them will be able to cover it and how many will go belly up? Of the ones who stay in business, how many will have to charge exorbitant premiums next year to make up for their losses? And if premiums soar, some portion of their consumers are bound to cancel their plans, which means even less revenue for the insurers and the need for even higher premiums, etc. That’s the “death spiral,” and in theory that’s where single-payer comes in. If the insurance industry melts down because Congress cut its financial lifeline, what replaces it?

What’s fascinating about the BCBS talking points is that, in light of the rumblings on the left lately about single-payer, they may actually hurt the industry at this point more than they help. The “single-payer” talk won’t scare Republicans; they know they’re likely to have more control of Congress next year, not less, and they’re eager to find a weak spot in the Jenga tower that is ObamaCare that might bring the whole thing down. Killing the risk corridor could do it. Meanwhile, the “single-payer” talk might entice Democrats. Plenty of them, like Michael Moore and Noam Scheiber, defend ObamaCare not out of love but out of dutiful partisan obligation. They hate insurance companies and would leap at the chance to replace them with a government alternative but they’re stuck with the O-Care model for the time being. If the industry implodes, though, they’ll have a fully-formed alternative ready to go in the form of “Medicare for all.” And of course, as a matter of basic retail politics, Democrats want to be seen as anti-bailout as much as Republicans do, especially before a midterm election. Even assuming that Obama would veto a bailout repeal in the name of protecting his new partners in the industry, there’ll be intense political pressure on Democrats to cross the aisle and vote with the GOP to override it. I don’t think they’d get to 67 votes — the wound to ObamaCare, on which they’ve already spent so much political capital, would be too grave to inflict it so soon — but the politics of it would be attractive and we already know that they’re not averse to short-sighted political “fixes” to the law that actually make the industry’s adverse-selection problems worse. Between nervous red-state centrists like Mark Pryor who want to signal their unhappiness with O-Care and ideological leftists like Bernie Sanders who want to smash the insurance industry, how many Democratic votes might they get? Enough to get to 60 and force an Obama veto at least, right?

Exit question via Bob Laszewski: What happens when the “risk corridor” expires in 2017? Exit answer: Maybe nothing. By that point, U.S. health insurance will be so dominated by the exchanges and the penalty for not complying with the mandate will be so steep that you’ll have no choice but to sign up and pay what they want.

Tags: bailout, blue cross blue shield, boehner, insurers, lobbyist, risk corridor, single payer, talking points

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Source from: hotair

MaryLandrieu:You’redamnedrightIorderedthe

Mary Landrieu: You’re damned right I ordered the code red on affordable health-care coverage, and I’d do it again

posted at 5:11 pm on December 5, 2013 by Allahpundit

I’m having some fun with the headline, but honestly, I think her taking ownership of her role in passing O-Care (over and over again) is a smarter play than Mark Pryor’s “only Jesus has all the answers” approach. Realistically, if you voted for this Chernobyl, there’s nowhere to run from it. Pryor can claim that he was brainwashed by liberals or that the Lord opened his eyes or whatever, but conservatives aren’t going to punish him less if he convinces them he was a dupe of the left rather than a knowing participant. Landrieu’s making a rational wager here: If Obama can’t right the ship before next November, she’s finished no matter what she does to try to distance herself from ObamaCare. As is Pryor, of course. If he can right the ship and the law becomes less of a political liability, she’ll win the gratitude (and donations) of liberals for having stood by the program through trying times and even, I think, some grudging respect from centrist conservatives for not running from her record in a desperate moment. Either way, there is no spin for what’s coming. Her fate is largely out of her hands. Might as well embrace the suck and hope for the best.

That said, there’s a lot of suck still to be embraced. Read law prof Nicholas Bagley’s post today about how HHS might tweak the “risk corridor” (a.k.a. bailout) regulations of ObamaCare to increase payments to insurers now that Obama’s stuck them with the task of un-canceling people’s plans. The regs say that the feds need to compensate insurers if they incur excessive costs, but there are many ways to define “costs.” The more broadly HHS defines it, the more of your money insurers get. There’s no way to know how much that’ll be until we know how bad the adverse selection problem caused by the un-canceled plans and the endless website screw-ups is, but Megan McArdle tried a little back-of-the-envelope estimate the other day. Depending upon how many people enroll and what proportion of sick to healthy there is, it could be anywhere from $130 million to $7 billion. I wonder if Congress will appropriate that money or if, true to unconstitutional form, Obama will simply move it from one federal budget envelope to another. Stay tuned.

Tags: bailout, Louisiana, Mary Landrieu, ObamaCare, vote

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Source from: hotair

Payoff:Fedstoincrease“riskpayments”toinsurers

Payoff: Feds to increase “risk payments” to insurers in return for un-canceling plans

posted at 2:51 pm on November 26, 2013 by Allahpundit

We all know about the “risk corridor” at this point, yes? Designed to spread the risk of budget overruns among insurers, it could end up as a mechanism for a federal bailout of the industry if the ObamaCare exchange risk pool ends up being much older and sicker than everyone expects. When King Barack declared that he’d allow insurers to un-cancel old plans, notwithstanding what the ObamaCare statute has to say about it, he increased the odds of that bailout being necessary by allowing healthy people to leave the exchange risk pool (temporarily) and revert to their old, cheaper coverage. That means less revenue for insurers, which of course makes budget overruns for the exchange plans more likely. How could O possibly make it up to them?

You know how. A day after Obama announced his “fix” that doesn’t actually fix anything, CMS sent a letter to insurers reassuring them that the agency would “explore ways to modify the risk corridor program final rules to provide additional assistance.” Translation: The feds are going to shovel a little extra taxpayer money their way to cover the extra cost imposed by O’s buck-passing, ass-covering, eleventh-hour attempt to keep his “if you like your plan” promise after all. And now, here it is:

The U.S. government has issued a proposal that would likely increase risk payments in 2014 to health insurers offering plans on the Obamacare exchanges after the companies complained a recent policy change allowing people to keep their insurance policies had changed the financial equation.

The rule, published on Monday in the Federal Register, lowered the threshold at which risk payments kick in for the sickest health plan members. The government proposed paying insurers 80 percent of claims greater than $45,000 in 2014. Previously the lower limit was $60,000…

In addition, the government has proposed a state-specific adjustment for risk payments based on how many people in the state extend their current polices, Citibank analyst Carl McDonald explained in a research note.

Insurers thought they’d have enough profit flowing in from healthy people who’d been forced onto the exchanges that they wouldn’t need federal help in paying off claims below 60 grand. Thanks to Obama’s need to protect himself and his party politically, that calculation has now changed — and your money will make up the difference. If you’re one of the lucky few million who’s received a cancellation notice this year, that means you’re one of the law’s “losers” twice over. Happy Thanksgiving.

Oh, almost forgot: The feds don’t have a way of transmitting these individual risk payments to insurers yet because … that part of the ObamaCare website hasn’t been built yet:

Beyond the troubles with enrollment forms, which have been evident since the marketplace opened on Oct. 1, insurers are anticipating problems if IT workers from the government and outside contractors cannot soon build other parts of the online system that are running behind schedule.

For instance, starting in mid-December, the government and each participating insurance company are supposed to perform a monthly “reconciliation,” to make sure that each side has the same list of new customers, the benefits chosen by the consumers and the government subsidies for which they qualify. That feature of the online system, however, has not been built, according to people close to the industry and government officials.

Nor can the system handle another feature, scheduled to be ready when health plans take effect on Jan. 1, in which insurers are to be paid extra government money, through a method known as “risk corridors,” if their new customers are old and require expensive medical care. “It’s not built, let alone tested,” the industry official said.

Other parts of Healthcare.gov still aren’t working — uploaded ID documents have been known to disappear into the ether, as have “orphaned” enrollment records — but at least there’s some sort of infrastructure in place for those. The back end, where insurers receive data and money from the feds, represents the 30-40 percent of the exchange that still needs to be built from scratch. Show of hands: Who’s not-so-secretly enjoying watching the insurance industry learn what it means to partner with Barack Obama?

Tags: adverse selection, bailout, corridor, industry, insurance, insurers, ObamaCare, payment, risk, sick

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Source from: hotair