The Obama administration is preparing for a potentially unlawful bailout of the insurance industry, Fox News's Jim Angle reports.
The White House promised insurers they would compensate the companies if costs came in higher than expected due to greater numbers of unhealthy enrollees. "Insurance companies are at great risk and they may find that they have a lot of sick people and costs are way above what they thought they would be," said the National Center for Policy Analysis's John Goodman.
Obamacare architect Zeke Emanuel characterized the possible bailouts as "belts" and "suspenders" to support the insurance companies if they end up with too many sick policyholders.
Angle reported the administration plans to tax insurers who did better than expected and redistribute the money among companies who were weighed down by their sicker pools. However, should all companies do worse than expected, the administration said they would pro rate reimbursements to the extent of any shortfall.
Predictably, insurance companies pushed back warning such a scenario could result in higher premiums for customers. Frightened of the electoral implications, the Obama administration announced they would support the insurance companies with taxpayer dollars should all insurers perform poorly.
"'It won't cost the taxpayers any money.' That was their announcement in April. Then their announcement in recent days was, well, actually we will potentially run a deficit because we will pay to the insurers whatever is necessary," said James Capretta of the Ethics and Public Policy Center.
However, Angle noted Republicans on the Senate Budget Committee argue allocating additional funds to bail out insurers would require a separate appropriation from Congress. This in turn could set up another legal showdown with the administration over Obamacare, Angle said.
Published under: Obamacare , Zeke Emanuel