The chairman of the House Economic Growth, Job Creation and Regulatory Affairs subcommittee said Wednesday that taxpayers could end up bailing out insurance companies to the tune of $1 billion as a result of Obamacare.
The bailout, argued Representative Jim Jordan (R-Ohio), will result from a revenue-sharing program set up under Obamacare called the Temporary Risk Corridors Program. Jordan’s assertions run counter to previous Congressional Budget Office report that said the program would cost the government nothing.
“The American people have a right to know how much these backdoor bailouts will cost,” Jordan said. “While I have great respect for the analysts at CBO, their findings in this area did not square with the evidence presented by numerous health policy experts.”
The revenue-sharing is intended to offset insurer costs during the early stages of Obamacare implementation by distributing funds from insurers with healthier patients to those insuring higher numbers of older, sicklier patients.
Jordan told fellow lawmakers that, according to research involving 23 Obamacare co-op insurers and 15 traditional insurance providers, his committee estimates that the more than $730 million will be paid out to struggling insurers.
“The information provided by the insurers suggests that the total taxpayer bailout could well exceed $1 billion this year alone,” he said.
Republicans have previously attacked the risk corridor as being unlawful, based on opinions from the Government accountability Office and Congressional Research Service.
“Under current law, payments made under the risk corridor program would constitute an unlawful transfer of potentially billions of taxpayer dollars to insurers offering qualified health plans under the President’s health care law,” wrote Representative Fred Upton (R-Mich.) and Senator Jeff Sessions (R-Ala.) in a recent letter to new Health and Human Services Secretary Sylvia Burwell.
The lawmakers’ contention stems from a statement in the Administration’s 2015 fiscal year budget calling for the corridor funds to be moved through the Centers for Medicare and Medicaid Services. Sessions and Upton contend that Congress should hold the sole authority to authorize the funds.
“Without an explicit appropriation, any money spent on the risk corridor program would be based on an illegal transfer of funds and your agency could be held in violation of the Antideficiency Act,” the lawmakers said.