The Alexander-Murray ObamaCare Subsidy Bill Is A Bailout, Pure And Simple | Stock News & Stock Market Analysis

Health Reform: Although pitched as a bipartisan plan to “stabilize” the ObamaCare insurance markets, the bill now being talked up in the Senate would hand $14 billion over to the insurance industry and do nothing to fix ObamaCare’s underlying problems.

The proposal, developed by Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray, would restore the roughly $7 billion in annual “cost sharing reduction” subsidies paid to insurance companies through 2019.

This money is meant to offset the cost of providing plans with reduced deductibles and co-payments to low-income families. Insurers say that without the subsidy payments, they’d have to hike insurance premiums on everyone in the ObamaCare exchanges even more.

ObamaCare required lawmakers to authorize the CSR payments each year, but they never did so. The Obama administration simply paid them out anyway. But last week, President Trump announced that he was cutting off these illegal subsidy payments. By doing so, he gave Republicans some leverage to force more changes to ObamaCare; they could offer to restore them, temporarily, if Democrats agreed to some significant changes to ObamaCare.

The “compromise” Senate plan worked up by Alexander and Murray squanders that leverage.

In exchange for restoring the subsidies — as well as reinstating wasteful ObamaCare ad funds the administration rightly nixed — Alexander and Murray offer Republicans … nothing. Or about as close to nothing as you can get.

States would supposedly get more flexibility. But that’s a facade. The bill would merely “streamline” ObamaCare’s existing and extremely limited waiver process, for whatever good that will do. The bill would also expand eligibility to ObamaCare’s “catastrophic” health plan — which is currently only available to those under 30 and which almost no one buys. But even that meager change wouldn’t kick in until 2019.

Meanwhile, states would still be required to comply with all the ObamaCare rules and regulations and benefit mandates that caused the market turmoil in the first place. That means more rate hikes, more insurance defections, and more middle-class families priced out of the insurance market.

Remember: Even when the Obama administration was (illegally) making CSR subsidy payments, insurers were hiking premiums by double digits and dropping out of ObamaCare markets left and right, leaving vast swathes of the country with a monopoly market.

In fact, before Trump was elected, the number of counties with just one ObamaCare insurer jumped from 2% in 2015 to 21%. Arizona had 11 insurers in the ObamaCare exchanges in 2015, but just two this year. Even before Trump announced he was cutting off the CSR funds, insurers announced they were leaving still more markets next year.

ObamaCare backers say the ObamaCare exchanges were finally starting to stabilize before Trump messed things up. But we’ve heard this refrain every year, only to see another round of premium hikes and insurance exits. Had Trump not ended the CSR payments, premiums for 2018 would still have climbed by double digits — hardly the sign of a healthy, stable market.

Even the New York Times admitted as much, saying that “If approved, the agreement could provide a reprieve for the Affordable Care Act. … But consumers in many states will still face double-digit rate increases, and in many counties, health plans will be available from only one insurance company.”

Sen. Alexander says that protecting ObamaCare for two years is a big win because “After that, we can have a full-fledged debate on where we go long-term on health care.”

So, we’re supposed to believe that after seven years spent promising to repeal ObamaCare and then failing to do so, the GOP’s hand will be strengthened by letting ObamaCare run for another two years — with the added complication that Republicans will have “temporarily” put their stamp of approval on every one of ObamaCare’s key features.

Trump has sent mixed signals about this deal. But on thing should be clear: If Republicans are going to agree to pony up an additional $14 billion worth of ObamaCare protection money, they should at the very least get some meaningful free-market fixes in return.


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Originally posted 2017-10-18 19:57:55.


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