By The Hill•
The headlines are awash with stories of huge ObamaCare premium cost increases. Some have even referred to the news as an “October Surprise.” But for those of us who read the bill and knew from the start that the President was lying when he said if you like your healthcare plan, you can keep your healthcare plan and that his plan would save families more than $2,500 a year, these headlines were completely predictable.
But it is a bewilderment that some Republicans are backing a bill that if enacted will insure that future premiums will cost even more. Oddly, the bill is named the Taxpayers Before Insurers Act, but in the end, it harms every American by jacking up their health insurance premiums even higher.
The bill – introduced by Sen. Ben Sasse (R-Neb) and Rep. Mark Walker (R-NC) – has a nice populist ring, at least to its title. Who could be against putting taxpayers first and insurance companies second? But in practice, it doesn’t work out that way.
ObamaCare included a temporary transitional reinsurance program for the first three years of the law – ending in 2016. Since it was understood that mandating insurance and including preexisting conditions in the coverage, would cost insurance companies a lot of money, this transitional reinsurance program was included.
Like the tax set up to create car insurance risk pools in states across the country, health insurance companies paid premiums into a pool collected by the federal government that was to be redistributed to those insurance companies that had the largest numbers of “sick patients” and whose insurance claims substantially outpaced their premiums.
The government has been collecting those reinsurance premiums from the insurance companies. In fact, the Obama administration paid out some of the collected money – a total of $7.9 billion in its reinsurance program in 2014, but less than the $8.7 billion it collected in payments. The Administration has rolled over the excess potentially to be paid out in 2015 and 2016. Meanwhile it can claim a smaller deficit despite its reckless spending record.
It is like refusing to pay part of your rent or mortgage so that you can claim your bank balance is higher. While it is technically true, you are just creating more problems and you don’t actually have more money.
And that is exactly what the so-called Taxpayers Before Insurers Act does. If the federal government is allowed to pocket any of the reinsurance premiums, the health insurance premiums that average Americans pay will increase even more to cover the short fall. So Americans may think they were put first, but it won’t be long before the rate increases get even worse and they realize that they were put last.
There is plenty of evidence that the high premiums are causing large numbers of families to opt out of insurance altogether contravening the very goal of ObamaCare.
To make matters worse, next year when premiums increase astronomically yet again, ObamaCare allies will claim that the increases are not the fault of ObamaCare, but the fault of Republicans and their Taxpayers Before Insurers Act. This will shift the blame away from ObamaCare and weaken efforts to repeal and replace it.
When the government assesses a charge that generates more funds in the Treasury than it rebates, that charge is a tax. Why would the GOP controlled Congress lead the charge to raise taxes?
The cleverly named “Taxpayers Before Insurers Act” doesn’t refund the fees that were collected. It also doesn’t offer to lower other taxes to offset the confiscation of the reinsurance funds.
No one was, or is, more opposed to ObamaCare than me. It was a bad law from the start and the bad headlines it is generating are no surprise. They are the natural result of a horrific idea implemented in an appalling fashion. ObamaCare must be repealed and replaced with market-based reforms that empower patients, not government or insurance companies.
But the Taxpayers Before Insurers Act will do nothing to repeal or reform ObamaCare and will weaken future efforts to do precisely that. To make matters worse, it formalizes more government misdirection, dishonesty, and theft.
George Landrith is the President and CEO of Frontiers of Freedom – a public policy think tank devoted to promoting a strong national defense, free markets, individual liberty, and constitutionally limited government.
The views expressed by contributors are their own and not the views of The Hill.