The Taxpayers Before Insurers Act | Citizens Against Government Waste

The Taxpayers Before Insurers Act

The WasteWatcher

Citizens Against Government Waste (CAGW) has written before about problems with the risk insurance sharing programs found in the Affordable Care Act, better known as Obamacare.  Under Obamacare, the risk-sharing programs, often called "the three Rs," are risk adjustment, reinsurance, and risk corridors.

Because of Obamacare’s restrictive mandates and regulations, plus the uncertainty of who would enroll in the new marketplace exchanges, the law’s designers created the three Rs to provide a financial backstop for private insurers in case they suffered economic losses.  Of course, the law has been a huge disaster, far more than its authors expected, with escalating premiums and deductibles and far fewer young, healthy people opting to purchase insurance than was needed to provide a stable market.

Desperate to keep Obamacare afloat, the Obama administration has changed the law’s requirements by administrative fiat several times, and that includes how the risk corridors and reinsurance provisions should be used.  CAGW, in its December 2015 Waste Watcher, described how the administration attempted to illegally use the risk corridors to bail out insurers by supplementing their losses with tax dollars but was stopped by the FY 2016 Omnibus Appropriations.

With respect to the reinsurance program, ACA required the Department of Health and Human Services (HHS) to collect a total of $25 billion from private insurers, of which $2 billion for each calendar year of 2014 and 2015, and $1 billion in 2016, was supposed to be sent to the U.S. Treasury to pay down Obamacare’s costs on taxpayers.  The remaining $20 billion was to be used to assist insurers for covering high-cost patients in the exchanges.  But because insurers have lost far more than anticipated, the Obama administration is in the process of illegally using $3.5 of the $4 billion already collected to bailout the insurers, instead of sending it to the U.S. Treasury as the law required.  (CAGW wrote about the reinsurance issue in its February 2016 Swine Line blog, Breaking the Law – Again.)

Fortunately, two members of Congress have introduced bills to stop the lawlessness and theft of tax dollars.  One bill, H.R. 5904, has been introduced by Rep. Mark Walker (R-N.C.) and the other, S. 2803, has been introduced by Sen. Ben Sasse (R- Neb.).  Both bills have the same name, "The Taxpayers Before Insurers Act."

The legislation requires HHS to deposit $5 billion to the U.S. Treasury within 45 days of the law's enactment or have $5 billion of its operating budget, approximately 50 percent, rescinded.

The Council for Citizens Against Government Waste, as well as many other organizations, support the legislation.  It is time for the lawlessness to stop and that hard-working Americans have their tax dollars protected from the failing Obamacare.

Are your Senators or Representative co-sponsors of these bills?  You can find the cosponsors of H.R. 5904 and S. 2803 here and here, respectively.

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