by Betsy McCaughey | December 16, 2015 12:04 am
As Congress rushes to pass an omnibus tax/spending bill for the coming year, it’s concocting a special tax break for health insurance companies. It’s a backdoor bailout.
Until this week, insurance company lobbyists and the White House were pushing for a bailout, spending taxpayer dollars to cover what insurers are losing on Obamacare plans. That bailout so infuriated the public that D.C. insiders switched gears. Now they’re offering a tax break for the whole health insurance industry.
Don’t be bamboozled by the switch. This last-minute tax break is a handout in disguise. We the taxpayers are still on the losing side in this crony capitalism deal.
Obamacare is collapsing like a house of cards. Nearly all insurers are bleeding red ink trying to sell Obamacare plans. Last week, insurance giant Cigna hinted it will drop out of Obamacare after 2016. Earlier, the biggest insurer in the nation, UnitedHealth, revealed it will likely quit Obamacare after 2016. Though these insurers are highly profitable overall (their stocks are soaring) they’re losing billions trying to sell the unpopular Obamacare plans.
If insurers drop out of Obamacare, the president’s health law will collapse on its own. Republicans are still trying to kill it. Last week, the U.S. Senate passed a bill to repeal the Affordable Care Act. That was mere Kabuki theatre — President Obama will veto it. What matters is what Congress is doing in this week’s giant legislation to keep insurers happy and the health law alive.
Just hours after UnitedHealth’s bombshell announcement, the Obama administration tried to calm insurers, sending out a memo full of reassuring promises. It vowed to go to Congress for funding to reimburse insurers for their losses.
The administration wanted to put tax dollars into a program set up under the Affordable Care Act called “risk corridors.” Insurers profiting under Obamacare are supposed to pay into this program to help other insurers who are losing money. But with nearly all insurers losing money on Obamacare plans, there’s not enough money in the pot. That’s why the Obama administration pushed for a bailout, using taxpayer dough.
When you pull back the curtain, here’s what it’s all about: First pass a law requiring the public to buy insurance company products. Then impose big penalties on anyone who doesn’t buy. Finally, when insurers still can’t make money, bail them out using taxpayer dollars.
Outrageous. Fortunately, Republicans in Congress showed backbone and refused to go along. By the end of last week, the bailout idea was dead.
But behind the scenes, the White House and industry lobbyists continuously pressed Congress for special concessions to insurers.
With all this pressure, the lawmakers’ principled stand didn’t last long. The omnibus bill reportedly contains a huge tax concession to the same industry. Money is fungible. This rewards the same players. The new deal suspends the Health Insurance Tax for a year. Suspending the tax is in effect handing the industry an estimated $12 billion dollars a year, according to the Congressional Budget Office, exceeding even what the bailout would have cost.
Health law “should not subsidize companies that sell [insurance],” says Doug Badger, former White House policy adviser. But that’s what’s happening here.
Most tax breaks are good. But this one shifts the burden onto the rest of the nation’s taxpayers. Obamacare has to be paid for. If not by insurers, then by the rest of us and our grandchildren.
Meanwhile, any lobbyist-driven deal that rewards insurers while the public faces soaring deductibles and copays and limited access to doctors is a cruel trick. It’s obviously designed to keep a flawed health scheme on life support, when We the People deserve better.
Betsy McCaughey is a senior fellow at the London Center for Policy Research and author of “Government by Choice: Inventing the United States Constitution.”
Source URL: https://rightwingnews.com/column-2/obamacare-bailout-in-disguise/
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