Obama Bailout For Health Insurance Industry?
By Steve Barlotta, CPA
Once again the Obama administration has issued new provisions to its healthcare law.
And being consistent with past revisions to this law, the move was buried in hundreds of pages of new regulations. These provisions could potentially make billions of taxpayer dollars available to those health insurance companies that provide coverage through the Affordable Care Act.
The change in regulations essentially provides health insurers with a back-up plan. If they keep rate increases modest over the next several years and lose money, the Obama administration will use federal funds to cover the shortfall of the health insurance providers. It’s difficult not to see this as a veiled attempt to subsidize the health insurance industry at the expense of the taxpayers.
The President’s critics have pointed out that by making this move, insurers will be enticed to keep premiums low for 2015. And these modest rate increases will be announced by the insurance providers, conveniently, just prior to this year’s congressional midterm elections.
And again I have to question the legality of these new regulations. My understanding of the checks and balances that exist between the executive and legislative branches of government, is that it prohibits the President from giving away taxpayer dollars without the explicit authorization from Congress.
Finally, why has the President been so willing to accommodate businesses in acclimating to the to the Affordable Care Act? A few months ago, he exempted companies with 50 to 99 full-time employees from providing health care coverage until 2016. Now President Obama is providing a safety net to the big health insurance companies by covering their losses. Why wasn’t this same consideration given to the individuals who lost their existing policies and then saw their new premiums increase drastically?
