The Next Obamacare Scandal: A Taxpayer-Funded Bailout Of Insurers

Tyler Durden's picture

The teleprompter is still hot from all the Obama spit unleashed in his latest sincerely passionate denial that his administration knew anything, anything at all, about what is merely the latest scandal to rock the president, this time surrounding the Veterans Affairs fiasco, and already a brand new scandal is taking shape, this one Obama however will not be able to sweep as easily under the rug. The LA Times reports that the "Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money." In other words, yet another taxpayer funded bailout.

More on this stunner from LA Times:

The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall's congressional elections.


Administration officials for months have denied charges by opponents that they plan a "bailout" for insurance companies providing coverage under the healthcare law.


They continue to argue that most insurers shouldn't need to substantially increase premiums because safeguards in the healthcare law will protect them over the next several years.


But the change in regulations essentially provides insurers with another backup: If they keep rate increases modest over the next couple of years but lose money, the administration will tap federal funds as needed to cover shortfalls.


Although little noticed so far, the plan was already beginning to fuel a new round of attacks Tuesday from the healthcare law's critics.

Perhaps the reason why it took so long for the "critics" to get to the fine print is because there are already burried and preoccupied digesting all the other scandals rocking Obama which, under any other administration, would have resulted in the objective media screaming for mass terminations, if not the scalp of the president himself.

Yet somehow, with a daily orchestrated wink and a smile, so far Obama has been able to writhe his way out unscathed from virtually everything.

We doubt this time will be any different, especially if and when the latest round of executive orders come flying:

Although more than 8 million people signed up for health coverage under the law, exceeding expectations, insurance companies in several states have been eyeing significant rate increases for next year amid concerns that their new customers are older and sicker than anticipated.


Insurers around the country have started to file proposed 2015 premiums, just as the midterm campaigns are heating up. Obamacare, as the law is often called, remains a top campaign issue, and big premium increases in states with tightly contested races could prove politically disastrous for Democrats.


If rates go up dramatically, consumers may also turn away from insurance marketplaces in some states, leading to their collapse.


Proposed increases in a few states where insurers have already filed 2015 rates have been relatively low, with several major carriers seeking just single-digit hikes. But insurers in closely watched states, such as Florida, Pennsylvania, North Carolina and Arkansas, are still preparing their filings.


"It's absolutely paramount to keep premiums in check," said Len Nichols, a health economist at George Mason University who has advised officials working on the law.

How could this possibly happen: simple - socialized central-planning is always, without fail a precursor to failure:

To stabilize this new system, the law set up a complex system of funds, including one known as the Temporary Risk Corridors Program, that collect money from insurers and transfer it from companies with healthier, less expensive consumers to those with sicker, more costly consumers.


This system was supposed to pay for itself, as does a similar one used to shift money between drug plans in the Medicare Part D program.


But insurance industry officials have grown increasingly anxious about the new system's adequacy.

So who will foot the bill for insurers' shortfalls?

Pressure is most acute on insurers in states where healthy consumers were allowed to remain in old plans that are not sold on the new online marketplaces, an option Obama offered to states amid a political firestorm over plan cancellations last year. The president had promised people would be able to stick with their plans.


The renewal temporarily solved a political problem for the White House, but created a new one. Maintaining these old plans kept many healthy consumers out of the marketplaces, making the pool of new customers less healthy and therefore potentially more expensive for insurers, according to experts.


In a series of White House meetings over the last several months, Obama and other senior administration officials have sought to persuade insurance company CEOs to nonetheless hold rates in check, arguing that the marketplaces would stabilize over time. But with proposed 2015 rates beginning to come in, the administration acceded to industry demands for a clear guarantee that more money would be available to cover potential losses.


"In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers," the regulation published Friday notes. "In that event, HHS will use other sources of funding for the risk corridor payments, subject to the availability of appropriations."


That language allows the administration to tap funds appropriated for other health programs to supplement payments to insurers, according to administration and industry officials.


Among congressional Republicans, the decision has raised concerns. "If the program costs more than it brings in, the secretary would be able to divert money intended for other programs," Republicans on the Senate Budget Committee warned.

In other words, "you" dear US taxpayer. And because once you start the bailouts you don't stop, and since this is merely the first manifestation of what happens to the economy when the true impact of the past 6 years of Obama's "executive order"-based rule emerge, prepare for many more bailouts.

The good news of course is that it will be up to you again, dear taxpayers, to pay for the physician bills of the drivers of "rolling sarcophagi" made by that other bailed out corporation, GM, whose record 30 recalls so far this year would never have become public knowledge had it not been exposed that its menegement, which was part of both the new and old GM, been actively covering up the shoddy quality of its products and the deaths of its customers, just so the company that only exists thanks to the sunk costs of even more taxpayers wouldn't incur a few extra repair costs.

And what can be nobler than paying for the healthcare of your fellow human being?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Chupacabra-322's picture

Shit! For once I was out in front of Tyler on this one. I posted the following off topic on the Bernanke thread:

Off topic but interested Tyler hasn't picked up this interesting piece up on Drudge.

The Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money.

The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall's congressional elections.

Haus-Targaryen's picture

How many more years before US depositors get Cyprused.  I give it 3.

alphamentalist's picture

regrettably, if you you don't like your DingleBarry you can keep your DingleBarry.

MillionDollarBogus_'s picture

"Off topic but interested Tyler hasn't picked up this interesting piece up on Drudge."

That is interesting based on the fact that Drudge and ZH seem to be merging their content...

MarsInScorpio's picture

Just sent to Noam N. Levey, bylined author of the LA Times story:


Your quote: “Although more than 8 million people signed up for health coverage under the law, exceeding expectations”


My understanding of that number is that it does NOT represent those who’ve paid up for their coverage, but rather anyone who put anything into a shopping cart – whether they paid for it or not.


Which means the real number of people who have signed up and will receive coverage is about 3-million.


Why do you repeat the propaganda spin from Obama rather than tell the truth?



max2205's picture

This country smells like shit

Haus-Targaryen's picture

When the Equity/Housing/Debt bubble we are in right now explodes, someone explain to me why I should keep paying on my student loan debt, when default rates will be 30%+ and there simply won't be the manpower out there to collect on it all?

Renewable Life's picture


The banks that loaned the money to you will be stealing it back from "depositors" anyway, the government will be shocked and "on the job" saving the American people from themselves, your right, there will be absolutely NO incentive other then your own honor, that will keep you paying!!

Welcome to the New World kid!

Haus-Targaryen's picture

See, I have my honor.  I don't ride the S-Bahn without paying for a ticket.  Why?  Because my personal honor is definitely worth more than the 2,15€ it costs.  I probably would return a few thousands bucks I found in the Subway too. 

*However* every man has a price, and my price just happens to be 6 figures in size. 

eatthebanksters's picture

He will singlehandedly destroy our middle class, destroy our military and turn us into subjects of a socialist oligarch led utopia (for the oligarch's and their friends).  Wow, Atlas is shrugging right now...time to look for that valley in Colorado (or elsewhere).

wee-weed up's picture

Change "He will" to "He has" and you'll have it right.

Lost My Shorts's picture

Oh, come on, have some sympathy.  Poor Barry is squeezed between a rock and a hard place and another rock:

1) People don't want to pay high premiums

2) Insurance compaines want big profits

3) Everyone screams when high-priced hospitals and doctors go "out of network" (i.e. everyone screams when the market works in health care)

The only escape from the squeeze is taxpayer money (or telling millions of Americans to just go die, you can't have care -- no wait, that is a death panel !!! can't do that, so taxpayer money it is).

Cathartes Aura's picture

you really believe Obama "singlehandedly destroyed our middle class" and "our military"?

wow.   moar powerful than Putin even.

((and who is voting to be included in that "our" nowadays??))

Disenchanted's picture

Yeah really...Everything was just peachy keen until Oblahma came along.


JRobby's picture

They will call you up and scold you.

I ask the caller where they are located so I can come by and drop off a check. That usually shuts them up.

onewayticket2's picture

it's an election year....cannot have premiums skyrocket.


disabledvet's picture

Is the fool the one who pays for the insurance?

I imagine if you can afford the insurance you in fact do want to pay for it given this story. We seem to be creating a two tiered healthcare system ironically enough. Those who are healthy and can pay...and everyone else.

CheapBastard's picture

Moar Bailouts means gold will rise further as massive liabilities pile up.....that's just another reason Russia, China, Soros and even pauson are stacking.

power steering's picture

There sre more scandals than TV channels and as such nobody cares anymore about them especially since the media wont puersue any of them or clean them up and make them intelligible to the knuckle dragging sheeple

lakecity55's picture

Obviously, he never qualified for the office to begin with.

But, his crimes should have had him in prison two years or three years ago.

Falconsixone's picture

What's Drudge? ZHeee Heee Heee Rules

GotNuttin'todo's picture

Funny. We need William to draw us a knuckle-dragging sheeple.

813kml's picture

No problem, removal of olfactory receptors is covered under Obamascam.

GotNuttin'todo's picture

Problem is, there is no place to run. Everywhere smells like shit, covered in merde, smoothered in mierda, completely hidden by scheibe ...

drendebe10's picture

It's not the country.... it's the continually re-elected corrupt ruling political turds that smell... and smell they do...  P.U.

Kirk2NCC1701's picture

With all the Recalls going on, when will O get his Factory Recall?

813kml's picture

RoboBama is functioning according to its programming, self-destruct sequence has commenced.

duo's picture

This is looking more and more like single payer (the taxpayer) every day.

Just wait, in a couple of years everyone will be screaming for it, as the country is turned into a giant VA.

BlindMonkey's picture

Being a vet myself I have made a bumper sticker slogan about this very topic.


"If you think socialized medicine is a good idea, ask a Vet about the VA."

Spastica Rex's picture


Is truth your new shtick?

Chupacabra-322's picture

Why? Because MDB is "all in" on the Criminal Defrauding of The American People via The Act of 1871 & Federal Reserve Act of 1913 via the Criminal UNITED STATES, CORP. INC.

That's why. The Entity (Troll) probably Government paid or NSA asshole has been trolling this site for years. MDB has just been playing stupid. Running with the False Narratives & PsyOp.

earnyermoney's picture

Are you referring to either MillionDollarBonus or MillionDolarBogus or both?

BlindMonkey's picture

There is one and only one MDB my friend.  The other one of which you speak is a cheap imposter riding the coattails of the legend.

Vampyroteuthis infernalis's picture

I keep telling Obama drones it is simple as this, "The amount of money brought in by paying healthy customers will NEVER cover the costs of high risk customers under Obamacare." I knew the bailout was coming soon. 

Obamacare = fail


BlindMonkey's picture

Do you mean to say that AIDS paitents with TB and Hep C cannot cover their own healthcare costs?  I am shocked I tell you!!!  Simply shocked!!


SilverIsKing's picture

Jeb Bush crawling out of the shadows to make a run for President shows that the PTB is buying insurance against Hillary not running (Benghazi anyone?).  The articles I've seen so far are all positioning Bush in a positive light which, from an MSM perspective, is highly unusual.

Soon it will be a media pile on on Obama with Jeb Bush positioned as our savior.


tip e. canoe's picture

beginning to think Bridgegate was a combined HillBilly/BushBoyz hitjob.

kill 1 opponent to 2 birds with 1 donut.

Oldwood's picture

Don't hold your breath. The media will always back the republican they think has the best chance to win nomination, yet lose the general election. Far too many republicans don't want another Bush. But after yesterday's primaries, the republicans are convinced they can win again with the same old centrist bullshit that has gotten us to exactly where we are today. Winning for them is claiming victory in increasing the travel time to hell by a quotient of two over the left. There are some of us a little more concerned about ten years hence than these bastards. The road to Hell indeed.

NotApplicable's picture

+1 for the definition of winning.

Meanwhile the leftys' would be happy with the same outcome.

McMolotov's picture

Jeb — the "smart" Bush with his Mexican wife. It's a fucking PR guy's wet dream. Can you imagine if he runs against Biden? He wouldn't even have to campaign; he could just stand there and let Biden do all the talking.

If Jeb wins, I think the Canadian identity I fake out of embarrassment for being an American will finally have to become the real thing, eh.

Dr. Engali's picture

A group of guys that I have regular lunch with genuinely believe that things can be fixed if Jeb gets in the white house. I'm not talking about shmucks.. engineers, chemists, and Drs.  They all look at me like I'm a freak when I say.. he's just the same horse of a different color. If this is America's brightest I may have to join you in Canada.

GotNuttin'todo's picture

Well don't move to Toronto as an example.

Hulk's picture

I recommend watching "Fargo" for help with pronunciation...

NotApplicable's picture

I can't imagine Biden can even win the D ticket. Even someone like Kucinich could beat him up (assuming he was allowed to speak).

Everybodys All American's picture

Very true. Any time the media starts the polling and positioning these guys I get sick to my stomach. The whole system of choosing a president is rotten to the core. It used to be that primaries  and process mattered. It used to be that the peoples choice came froma fair election process. It doesn't seem to be the case any longer. The media can now control the outcome cecause a lot of people are undeducated or misinformed easily.

mc225's picture

'it used to be'... in your dreams?

10PastMidnight's picture

you folks still vote, are you fucking serious? sooner the plebs stop supporting these ass wholes by voting, the sooner we can get on with our lives and start something decent, like a new system.

Groundhog Day's picture

Obamacare is another piece of shit legislation for the insurance companies.  A couple I know (husband 67, wife 63) needed temporary insurance for the wife for 2 years as she doesn't qualify for medicare yet. They spoke to all their doctors and worked out a fair cash payment for all thier needs as they have the money to do so.  They only wanted a catasrophy policy in case she gets hospitalized.......under the new obamacare / affordable care myass act those policies no longer exist.  She has to take one of the ridiculous policies for 850/mo.

my advise for her was to give her children the money now....claim poverty and you'll be 100% covered