NCPA fellow backs Republican claims surrounding Obamacare lawbreaking
The Treasury was supposed to receive $10 billion in 2014 and another $2 billion in 2015, but there have been no payments as the law requires.
“The U.S. Department of Health and Human Services has not explained the shortfall,” Devon Herrick, health economist and senior fellow at the National Center for Policy Analysis (NCPA), recently told Patient Daily. “Apparently, the agency underestimated the assessment needed to fund the $12.02 billion needed for the program. The $63 assessment -- per covered life -- should have been closer to $81.”
Herrick explained that if the law was broken, it could affect how the ACA works in the future.
“Legal opinions vary,” he said. “But it does appear the agency arbitrarily decided to make insurance companies a priority: by a) paying them first; b) upping their reinsurance from 80 percent of large claims to 100 percent of large claims, lowering the attachment point for reinsurance from $60,000 to $45,000; and, c) using funds destined for the Treasury for temporary transitional reinsurance.”
Herrick argues that the decisions made by Health and Human Services (HHS) to reallocate funds is another demonstration of the ACA falling short on its promises.
“I believe it does affect the ACA,” he said. “There has been much disagreement on the sustainability of the ACA. Premiums are rising, while insurers are losing tremendous sums of money. As part of the Cromnibus Budget Agreement, the Risk Corridors program was required to be budget neutral.”
Herrick explained that the administration did not particularly like this neutral budget agreement because it knew the success of the ACA lay in having insurers willing to sell coverage in the exchanges. Yet, this budget agreement also means that taxpayers will not be on the hook for losses greater than what that specific program brings in.
“The temporary transitional reinsurance program -- $63 per covered life -- is a temporary program to transition insurers until their losses stabilize,” Herrick said. “The losses have been much greater than anticipated. The reason why Republicans are so angry about this diversion of funds from the Treasury is because it represents a cover-up of Obamacare failures by the administration. It also represents a taxpayer bailout of a program that Republicans believe is failing.”
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