Obamacare | The Government's Takeover of Health Care

The Obamacare Insurance Bailout

There's been lots of talk about insurance companies and their role in Obamacare.  While that's hardly surprising for obvious reasons, it's the discussion about bailing out the health care companies that is truly puzzeling.  Obamacare will costs tens of trillions of dollars and American taxpayers will pay for the brunt of it, unsurprisingly.  What's more, an intersting point has been raised that while the insurance companies are paying dearly for Obamacare, it turns out that they may not need the bailout they've been clammoring for.

The American Thinker takes a different look at the situation, one where health insurance companies reap huge profits from Obamacare, while ALSO getting an Obamacare bailout.  Now it makes sense why all of the health care companies supported the law.

In 2013 only a handful of regional health insurance companies, most notably Universal Health Care Group, Inc. in Florida, filed for bankruptcy protection. The National Association of Insurance Commissioners reports the largest 125 health insurers collected approximately $713 billion in premiums in 2012. For decades healthcare insurers denied coverage to individuals with preexisting conditions under the guise that doing so would have sent them into a financial death spiral. Now insurers are threatening to raise premiums unless they are protected from the increased costs of insuring sicker people under ObamaCare. And again the Obama administration has yielded to their latest demand, even though the law already provides afinancial safety net for insurers.

The ObamaCare Risk Adjustment Programs are designed to protect insurers from the very loss they claim they are now vulnerable to. The law’s risk adjustment models were developed using the Medicare Part C (Medicare Advantage) and Part D (Medicare Prescription Drug)models -- two federal programs that provide healthcare coverage for people over 65, including those with preexisting conditions. The Medicare Advantage program calculates reimbursement based on estimated claim costs rather than on a “fee for service” basis; insurers will be similarly reimbursed under ObamaCare. Insurers’ latest forecast of impending financial doom is another smoke and mirrors tactic to deflect attention from the fact they already are adept at maximizing reimbursement and minimizing claim loss under the Medicare programs. 

Contrary to their claims of impending financial disaster, insurer profits will increase, not decrease, under ObamaCare. At the same time the Obama administration is writing insurers a blank check, insurers are forging new partnerships and affiliations with hospitals and offering bonuses to doctors who agree to treat patients using standardized guidelines instead of more expensive drug protocols and experimental treatments. These unholy alliances and financial incentives will do nothing to improve the quality of patient care but they will reduce insurer healthcare costs and increase their profits. 

Using fear as their most effective weapon, insurers have extracted yet another concession from the Obama administration even though no loss has yet occurred. If this latest bailout is not stopped, the healthcare insurance industry will have triumphed in transferring all future loss onto the backs of American taxpayers. 

Despite being handed a captive consumer market, insurers still are not satisfied. Healthcare insurance companies will not go bankrupt under ObamaCare -- to the contrary, they will continue to reap record profits.  The sky was never falling.  Healthcare insurers simply raised the ceiling. 

Justin Credible is a contributing editor for Habledash.

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