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I'm Just Sayin': Plan B for Obamacare stands for Bailout

I'm Just Sayin' - DuWayne Paul

For those who are paying attention, the Affordable Care Act (ACA), “Obamacare” just makes our heads spin. It is mind boggling to keep up with the weekly changes being made to the law and how that will impact the health care industry, costs and implementations.

So far, our president has issued 20 changes to the law by executive order. Wait a minute! I remember him saying the law is the law and we have to live with it; but, I guess that only means to live with the parts he wants us to live with and anything he wants to change, it just happens. Well, I guess it turns out Nancy Pelosi was right. Or, was she?

Pelosi’s famous comment from 2009 was, “We have to pass the law to find out what’s in it.”

Now we are finding out, but it keeps changing and no one knows for sure what to expect or what the implications are on the health care system and the economy.

To write about all the stumbles, fumbles and implosions of Obamacare would take more than the space allowed for in this column. I think an entire book could be written about it. Whatever our individual thoughts about Obamacare are, we each have a right to our opinion; but there is one issue about this law that has gnawed at my thoughts for a couple years now.

When the law was passed in 2009, the insurance industry was relatively quiet about the specifics and whether they supported the law or not. The changes to the health care system and what would be required of insurance companies seemed to be a huge burden that would involve tremendous cost increases. How were they going to absorb the cost increases, provide many additional services, and do it at lower prices (as the president promised but now we see is false)? So, if Obamacare implodes and is a failure, what is the Plan B?

On December 18, 2013, in a committee hearing at the House of Representatives, Jason Furman of the Council on Economic Advisers was asked if the administration had a Plan B in case enough young people would not sign up to make the program financially viable for insurance companies.

His answer was, “There’s a Plan A, which is to enroll as many young healthy people as you possibly can.”

So, by that answer, there is no Plan B, but, there is.

Written into the ACA is the provision for “risk corridors.” Risk corridors are how economists define a typical ‘CYA.’ As applied to Obamacare, what it basically means is the government will assume some of the risk for insurance companies during the first three years of the healthcare rollout. If an insurance company’s targeted costs (actuarial projections) are exceeded and they incur more than 103 percent of premiums in costs, the government will reimburse them a significant portion of those costs (CYA). It looks like that is going to be the case based on what has been reported so far.

So, there you have it. Plan B is a bailout for the insurance companies.

Knowing that, it makes perfect sense to me why the insurance companies were willing to get involved. Why not? If they have losses, the taxpayers will cover it! Didn’t we just go through this with the financial and auto industries five years ago? Oh, now I remember. That was all George Bush’s fault. Let’s just blame Bush for the Obamacare fiasco. We know we are going to hear something like that anyway. I’m just sayin’.

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DuWayne Paul of Alexandria is a regular contributing columnist for the Echo Press.