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REPORT: Obamacare Bailout Planned for Insurance Companies…

Weekly Standard [1]
January 13, 2014

Robert Laszewski—a prominent consultant to health insurance companies—recently wrote [2] in a remarkably candid blog post that, while Obamacare is almost certain to cause insurance costs to skyrocket even higher than it already has, “insurers won’t be losing a lot of sleep over it.”  How can this be?  Because insurance companies won’t bear the cost of their own losses—at least not more than about a quarter of them.  The other three-quarters will be borne by American taxpayers.

For some reason, President Obama hasn’t talked about this particular feature of his signature legislation.  Indeed, it’s bad enough that Obamacare is projected [3] by the Congressional Budget Office to funnel $1,071,000,000,000.00 (that’s $1.071 trillion) over the next decade (2014 to 2023) from American taxpayers,through Washington [4], to health insurance companies.  It’s even worse that Obamacare is trying to coerce Americans into buying those same insurers’ product (although there are escape routes [5]).  It’s almost unbelievable that it will also subsidize those same insurers’ losses.

But that’s exactly what it will do—unless Republicans take action.  As Laszewski explains, Obamacare contains a “Reinsurance Program that caps big claim costs for insurers (individual plans only).”  He writes that “in 2014, 80% of individual costs between $45,000 and $250,000 are paid by the government [read: by taxpayers], for example.”

In other words, insurance purchased through Obamacare’s government-run exchanges isn’t even full-fledged private insurance; rather, it’s a sort of private-public hybrid.  Private insurance companies pay for costs below $45,000, then taxpayers generously pick up the tab—a tab that their president hasn’t ever bothered to tell them he has opened up on their behalf—for four-fifths of the next $200,000-plus worth of costs.  In this way, and so many others, Obamacare takes a major step toward the government monopoly over American medicine (“single payer”) that liberals drool about in their sleep.

Full article here [1]