Sen. Marco Rubio may be seeing a rise in his poll numbers soon. He may have been responsible for dealing the largest blow to Obamacare funding since its inception five years ago. The dramatic circumstances became crystal clear on Monday.
A 2014 budget measure that was introduced by Rubio, a presidential hopeful, is causing many insurers to drop out of the Obamacare exchanges, experts say. Tim Jost, a healthcare law professor at Washington and Lee University, said of Republicans in Congress, “I think this is one of the most effective things they’ve done so far in terms of trying to undermine the Affordable Care Act,” Since fall began, over a dozen healthcare companies have dropped Obamacare. Many fear the Obama administration doesn’t have the cash to fund it.
The biggest blow comes from United Healthcare, the nation’s largest health care insurer. They specifically mentioned the inevitability of a funding shortfall last week. They threatened to end its participation in the exchanges after 2016. The hesitance by major healthcare providers swirls around an obscure program in the Obamacare law known as “risk corridors.” It was designed to shield insurers against losses.
In 2013 Sen. Rubio lashed out at the program terming it a “taxpayer bailout.” He authored op-eds against it. He even testified as an inspired witness at a House Oversight Committee hearing. He took his crusade directly to the top House Republicans at the time.
In 2014 Rubio made a speech on the Senate floor where he said, “There is a problem with the way Obamacare exchanges are now designed that have not yet received the attention they deserve, but I promise you’re going to be hearing a lot about it in the days to come.” His plan to get rid of risk corridors was unsuccessful. However his persistence contributed to a policy rider inserted into a 1,603-page spending bill passed at the end of 2014.
The provision is still in effect. It says the Department of Health and Human Services (HHS) can no longer tap other accounts. That includes Medicare funding to that contribute to the risk corridors program.
Now comes Rubio’s battle to fight against the “bailout” program. The senator and a dozen others seek to renew the provision or repeal risk corridors altogether. It must be completed and voted on by the Senate before Dec. 11 to avoid a government shutdown.
On Tuesday Rubio wrote in a letter to colleagues in both congressional chambers, “So far, we’ve succeeded in stopping the Obama administration from bailing out healthcare companies under Obamacare, and it’s critical that Congress once again stand with taxpayers to stop any taxpayer bailout of health insurers from happening.
Thanks to Rubio’s efforts, the storm clouds of dissension are growing. Conservative groups such as Americans for Tax Reform and Heritage Action for America endorsed a letter to Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) urging them to keep the risk corridor restrictions in place on Tuesday. Because of their fight, the administration could have spent more than $2.5 billion of taxpayer money “to bailout insurers for their poor business decisions,” the senator’s letter said.
In reality, the risk corridors program was designed to be only be a temporary block against high insurance claims. It was only designed to work for three years (2009 – 2011). The program was almost certain to need extra money in the first few years.The damaging effects of the budget-neutral requirement became clear in October.
The Obama administration could only afford to pay 13 cents of every dollar owed to the insurance companies. The news came if the insurance companies had already locked in their rates for fiscal 2016.
Within weeks, many start-up insurers known as CO-OPs announced they would close up. They lacked the cash flow to stay solvent. WinHealth Partners in Wyoming and Moda Health in Washington actually pulled out of the exchanges. That was the exact time United Healthcare said they may be doing the same thing in 2016.
The Obama administration is in panic mode. They will “explore other sources of funding,” including working with Congress. But insurers remain highly skeptical. It could be the beginning of a rush to the door and the demise of Obamacare as Americans know it now.