GOP Keeps Target on ObamaCare 'Risk Corridors'
by Brian Hughes
February 04, 2014
Source: Washington Examiner
House Republicans will move ahead Wednesday with a campaign to highlight Obamacare's “risk corridors,” deriding what they view as a bailout to the insurance industry -- even as the White House touts the program as a cost-saver.
The House Oversight and Government Reform Committee will hold a hearing Wednesday on the risk corridors, which were created by a provision of the Affordable Care Act to reimburse insurance companies if they are forced to pay more in medical claims than they projected.
Without the risk pool, the White House feared that premiums would be set too high to attract new consumers in Obamacare's federal and state-run exchanges. The administration is defending the measure, saying it provides protection to both the public and insurers during the rollout of the health care law, and aids providers who end up with a sicker, older pool of consumers.
House Republicans are painting the program in a much different light, with Wednesday’s hearing titled: "Obamacare: Why the Need for an Insurance Company Bailout?"
Doug Badger, a senior health policy adviser under President George W. Bush, will argue in the hearing that estimating the true cost of risk corridors is increasingly difficult, especially given President Obama's decision to let insurance companies continue offering existing insurance plans that would have been cancelled under new Obamacare regulations.
“Risk corridors will cost more than previously estimated, though their costs have not previously been estimated,” Badger will say, according to his written testimony. “At least with subsidies and reinsurance, we have a rough idea of how much taxpayers will be turning over to insurers. With risk corridors, we have none. The administration refuses even to hazard a guess.”
The hearings come with the White House already on the defensive over the health care law, following the rocky rollout of the healthcare.gov website and after a new Congressional Budget Office report on Tuesday predicted that Obamacare would cost 2.5 million equivalent full-time jobs over 10 years and would slow economic growth.
The Obama administration, though, is defending the risk corridors and openly mocked Republicans for pushing repeal of the provision.
White House press secretary Jay Carney on Tuesday pointed to one of the few bright spots in the CBO report, a finding that the risk corridors could bring the government $8 billion in net savings.
Carney said Republicans were inconsistent and had supported a similar risk-sharing provision in Medicare Part D but opposed the more recent effort simply because Obama’s name was attached to it.
"The only distinction is, coming at it from the Republican critique, is that the one for Medicare Part D potentially puts Americans at risk every year in perpetuity,” Carney said, “as opposed to the Affordable Care Act, which at least in theory could put folks at risk for three years, but in fact, according to CBO, is leading to $8 billion in savings.”
Obamacare critics point out that the CBO report warned of "many uncertainties" surrounding the figures, saying the estimate of $8 billion in savings was based on Medicare Part D and not necessarily indicative of how the risk corridors would play out.
A growing number of Republicans are coalescing around the idea of pushing a repeal of the risk corridors in exchange for raising the nation’s debt ceiling.
When asked whether the CBO projection that the government could profit from the net corridors had shifted the party’s strategy, one House Republican leadership aide replied, “My hunch is no.”
“Our path ahead is going to be determined by how member conversations go,” the aide added.
Republicans already see a winning message in focusing on how Obamacare will affect jobs, the administration’s unilateral delays of core provisions of the Affordable Care Act, and growing unpopularity with the law ahead of November’s midterm elections.
Also testifying at the House Oversight hearing is Sen. Marco Rubio, R-Fla., and John Goodman, president and CEO of the National Center for Policy Analysis.
“The ACA provides for federal government subsidies for the next three years, in addition to the types of risk adjustment one would normally expect,” Goodman will argue. “This puts taxpayers at risk for the cost of serious mistakes in the design of the exchanges.”