A bailout for the health insurance industry? After news that health insurers, including Humana and WellPoint, could receive approximately $5.5 billion from the federal government in order to cover their losses from Obamacare, opponents of President Obama’s healthcare reform law are saying taxpayers are bailing out the insurance sector.
It was reported Tuesday that the president’s proposed budget for the upcoming fiscal year includes a provision that assists health insurers who discover the law is costlier than previously expected that is based on the percentage of sicker and older enrollees who sign up compared with younger customers.
According to the Affordable Care Act (ACA), insurers that generate a three percent profit would allocate a portion of that money into a fund that is controlled by the government – it is estimated that there is about $25 billion in the fund. However, if an insurance company loses money then it could very well access that reserve pool. The $5.5 billion might be a considered a sign that more insurance firms will withdraw more money than add to it.
Republican lawmakers are arguing that the ACA measure is a bailout for insurers. For the past year, the GOP legislators have been attempting to repeal that part of the law, but the Congressional Budget Office (CBO) argued it would diminish the risk for insurance providers.
In addition, the president’s proposed budget consists of $117 billion for pharmaceutical industry rebates for medicines that are utilized by Medicaid and Medicare. Also, the government would spend an extra $15 billion over the next 10 years to train new healthcare providers in order to avoid a shortage, which the United States currently faces.
According to The Hill, the Obama administration is scheduled to announce yet another delay in implementation of Obamacare and avoid another wave of healthcare policy cancellations that could very well hurt Democrats in the upcoming mid-term elections.
“I don’t see how they could have a bunch of these announcements going out in September,” one consultant in the health insurance industry told the news outlet. “Not when they’re trying to defend the Senate and keep their losses at a minimum in the House. This is not something to have out there right before the election.”