Close Close

Life Health > Health Insurance > Health Insurance

GOP Health Plan Has Insurer Fund Once Criticized as `Bailout'

Your article was successfully shared with the contacts you provided.

(Bloomberg) — An Affordable Care Act fund that Republicans criticized as a “bailout” of insurance companies has resurfaced as a similar provision in the Senate GOP’s Better Care Reconciliation Act health care plan — though this time the objections are more muted.

The new bill’s $50 billion market-stability fund is intended to protect insurers that cover large numbers of customers with more-costly health problems from having to raise their premiums for the next four years.

Related: Official: ACA Risk Corridors Program Will Make Payments and Official: ACA Risk Corridors Program Will Make Payments) 

It’s much like an Affordable Care Act provision known as risk corridors that drew Republican fire. In December 2014, amid a push by Sen. Marco Rubio of Florida, Congress tacked a provision onto a spending bill limiting the funds that could be paid to insurers with poor exchange plan performance.

Jesse Lee, a former aide to President Barack Obama, labeled it “one of the great acts of ACA sabotage.”

There’s “no difference” between the insurer funds in Obamacare and the ones in the Senate Republican bill, said Sara Rosenbaum, a professor of health law at George Washington University.

Tim Jost, a health policy specialist and professor emeritus at the Washington and Lee University School of Law, said the provision is not a bailout but rather a policy designed “to reduce the reluctance of insurers to take on high-cost enrollees and make it more attractive for them to do so.”

Jost said Democrats didn’t include enough reinsurance and stability funds in the Affordable Care Act and they “phased out really quickly,” causing premiums to rise.

During his 2016 presidential campaign, Rubio touted his role in restricting the insurer funds. “When they passed Obamacare, they put a bailout fund in Obamacare,” he said in a GOP primary debate on Feb. 25, 2016, arguing that lobbyists “put a bailout fund in the law that would allow public money to be used, taxpayer money, to bail out companies when they lost money.”

Asked Monday if he has similar concerns about the insurer funds in the Republican health care bill, Rubio said he’s reviewing the provision.

“The stabilization fund is a transitionary fund,” Rubio said. “I need to see how it’s funded, where the money’s coming from and how it’s being appropriated. But I need to learn more about it. I do have some concern, no doubt.”

The BCRA bill — H.R. 1628, drawn up without any public hearings by Senate Majority Leader Mitch McConnell of Kentucky — includes $15 billion a year in market-stabilizing funds over the next two years and $10 billion a year in 2020 and 2021. McConnell had hoped the full Senate would vote on the measure this week, but he was forced to delay consideration for lack of support among his fellow Republicans.

Rand Paul, Mike Lee

Cries of a “bailout” under the McConnell bill’s insurer fund have been limited to conservative senators such as Rand Paul of Kentucky and Mike Lee of Utah. Top Republicans are defending the provision as important to make insurance affordable.

“The stabilization fund is important to keep premiums down and copays and deductibles reasonable,” Sen. Lamar Alexander of Tennessee, the chairman of the health committee, said Wednesday in an interview. “It’s helping people with less money afford to buy insurance.”

Sen. Mike Crapo of Idaho said Wednesday he supports the stabilization fund in the GOP bill and would vote for the measure.

Sen. Michael Bennet, a Colorado Democrat, said Republicans who are pushing the stabilization fund “may have discovered how much damage they did when they stripped out the risk corridors from the Affordable Care Act.”

“That’s one of the things about this debate that’s so infuriating — the things that they blame on Obamacare are actually, in this case, things that opponents of Obamacare passed,” he said in an interview Wednesday. 

— Check out Regulators Wrestle with ACA 3R’s Data Lag on ThinkAdvisor.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.