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ACA ‘Stabilization’ Plans Rear Ugly Head Again

Citizens’ Council for Health Freedom: The ‘Shell Game’ of Reinsurance Bails Out Insurers and Puts Financial Risk on Backs of Taxpayers


ST. PAUL, Minn.—After stabilization efforts for the failing Affordable Care Act appeared to have gone by the wayside, it seems as though lawmakers from both parties are taking another look, reports Axios.

In essence, Congress is considering taking money surreptitiously out of the back pockets of people so that less will be spent from their front pockets in premiums, says Citizens’ Council for Health Freedom (CCHF, www.cchfreedom.org).

“It’s a shell game,” said CCHF co-founder and president Twila Brase. “Reinsurance gives taxpayer dollars to insurers so insurers will lower the taxpayers’ premiums. It doesn’t actually lower costs. It just hides them. Reinsurance also takes away the financial risk that insurers bear and puts it on taxpayers, because taxpayers will pay a substantial part of the costs of every high-cost individual in the private market. Reinsurance also props up Obamacare—the exact opposite of what Republicans said they were going to do.”

Originally, Axios reported, the funding of the ACA’s cost-sharing reduction subsidies (CSRs) was a central focus. But now, many are turning away from that idea—and rightfully so, Brase says. Meanwhile, lawmakers are looking at reinsurance instead, which is included in a Senate bill sponsored by Sens. Susan Collins and Bill Nelson. Last year, most Republicans were opposed to the idea, but that seems to be changing.

A short-lived Obamacare reinsurance program that started paying insurers once patient costs reached $45,000 lasted only three years, Brase added. Taxpayers were on the hook until the costs reached $250,000. In 2014, Anthem booked $753 million and Humana booked $586 million in federal reinsurance payments.

“Insurers are no doubt angling to recover this lucrative source of revenue, but this time, though the states,” Brase said. “These proposed bills will give federal taxpayer money to states to create reinsurance programs just like the Minnesota Premium Security Plan that CCHF opposed last year. Likewise, Wisconsin Gov. Scott Walker is proposing reinsurance for his state, and Maine also has a reinsurance program. This keeps health plans happy and in the Obamacare game, but it leaves Americans with private health insurance in name only. Everyone in the private market will be on a government program once reinsurance begins.”

Republican action to stabilize Obamacare would be a major departure from the party’s long crusade against the law, The Hill reported, “but after having failed to repeal the Affordable Care Act last year, the discussion is shifting.” Rep. Ryan Costello (R-Pa.) is pushing a House bill that funds the controversial CSR payments and would force states into a federally funded reinsurance program in 2019 and 2020. Speaker of the House Paul Ryan said at an event in January that he thought there could be a “bipartisan opportunity” on the issue.

On Friday, Axios laid out the differences between the proposed reinsurance bills from the Senate and the House. The Senate bill “would essentially expedite the waiver process already in place to create a state reinsurance program, providing $2.25 billion a year and requiring states to opt in to a reinsurance program.” Costello’s House bill would provide $10 billion a year for three years and would temporarily fund CSRs. “States could use this money for a variety of methods intended to reduce premiums—not just reinsurance. If a state didn’t opt into using the money, the funding allocated to that state will be used to set up a reinsurance program by default.”

For more information about CCHF, visit www.cchfreedom.org, its Facebook page or its Twitter feed @CCHFreedom. Also view the media page for CCHF here. For more about CCHF’s initiative The Wedge of Health Freedom, visit www.JointheWedge.com, The Wedge Facebook page or follow The Wedge on Twitter @wedgeoffreedom.