Thank you for visiting paducahsun.com, the online home of The Paducah Sun.

June 2012
27 28 29 30 31 01 02

Click here to submit an event.

SURPRISE Obamacare bailout clause likely to hit taxpayers

Bet you thought we were through with big government bailouts. President Obama and Congressional Democrats have made a lot of political hay demagoguing that issue in the years since the financial crisis, TARP, and the politically unpopular bailouts of banks, insurers, and car companies. Won't happen again, we were told. Moral hazard, you see. Encourages too much risk-taking.

So it may come as a surprise to you to learn that an insurance company bailout was actually built into the darker reaches of Obamacare, a law passed exclusively by Democrats. And data released Monday suggests it is very likely to be triggered - unless Congressional Democrats facing a tough election year can be shamed into repealing the provision.

When Obamacare was passed, there was a fair amount of publicity about the socialistic aspect of the law that limited the profits health insurance companies could make on policies they sell through Obamacare exchanges. What was not publicized was the flipside of that provision, known as section 1342.

In addition to the profit limitation, section 1342 also created a loss limitation for insurance companies in the event that not enough young people bought policies to subsidize the below-cost policies insurers are required to sell to older and sicker people under Obamacare.

Well guess what. Figures released by the Department of Health and Human Services Monday suggest such a bailout is in the cards. HHS figures showed that of the approximately 2.2 million people who have signed up for coverage to date, only 24 percent are in the 18-to-34 age group. Analysts say that for Obamacare to work for insurers, 40 percent of those enrolling will have to come from the 18-to-34 age group. That's not happening. Not even close.

Republican Sen. Marco Rubio said Monday that the situation has been further exacerbated by the administration's reversal of policy amid the firestorm over the "If you like your insurance policy you can keep it" falsehood. He noted an SEC filing by one health insurance company saying the added burden of complying with that reversal means the company "now expects the risk mix of members enrolling through the health insurance exchanges to be more adverse than previously expected."

Translation: We're heading for a taxpayer bailout. The law, Rubio says, requires the government to make good on 80 percent of all losses insurance companies incur selling policies to the older, sicker age groups if Obamacare's financial assumptions fail to play out.

Rubio has filed a one-page bill that would repeal the bailout provision. He'll probably have a tough time getting that one through the Senate, but it is likely that the GOP-controlled House will pass a similar measure and send it to the Senate, at least to make the political point.

Columnist Charles Krauthammer, writing in the Washington Post several days ago, proposed an even more interesting idea - attach a repeal of the bailout provision to the upcoming debt limit bill. Politically, that would be pretty shrewd.

But it's small consolation for taxpayers. The real problem with Obamacare is that with each passing day it seems increasingly certain to collapse financially. When it does, either taxpayers or insurance companies are going to get stuck with the bill. As the law presently stands, taxpayers will shoulder the bulk of the burden.

Comments made about this article - 0 Total

Comment on this article

Your comment has been submitted for approval
captcha f63d169c9fe74db0bdb319294f1fbac2
Top Classifieds
  • AKC Shih-Tzu Vet checked, $600 731-3 ... Details
  • PILLOW TOPmattress sets NEW in plasti ... Details
  • Bedroom Suites New in Boxes. 6pc. che ... Details
  • Court-OrderedAUCTION2BR/1BA Single Fa ... Details
  • Museum Quality Ornate Antique Furnitu ... Details
  • ONLINE Real Estate Auction Nomin ... Details
  • Cash for Farms (270)339-8680 Details
  • Seasoned Firewood. 270-243-5815 Details
  • SEEING is believing! Don't b ... Details
  • 375 Acre Farm in Ballard County D ... Details
  • Owner Financing, new 3000sq ft,in Mar ... Details
  • 1900 Broadway1500 - 6600 sq. ft. offi ... Details
  • FHA, USDA, VA & Conventional Loan ... Details
  • 127 Acres Lyon CountyLake Barkley- De ... Details
  • Hyundai Accent '02 $1,800 97 ... Details
  • 05 CHEVY MALIBU $2500(270) 388-5983 Details
  • Nissan Altima '07270-994-580 ... Details
  • 2010 Nissan Maxima, loaded, 87,400 mi ... Details

Most Popular
  1. WHO reports rise of neurological disorder during Zika outbreak
  2. Tibetan monk to speak at WKCTC
  3. Sports facilities upgrade overdue
  1. 'Kynectors' hope to keep helping with health care
  2. Truth, victims matter most to local detective
  3. Tibetan monk to speak at WKCTC
  1. WHO reports rise of neurological disorder during Zika outbreak
  2. Tibetan monk to speak at WKCTC
  3. Sports facilities upgrade overdue

Check out these recently discussed stories and voice your opinion...