As unhappy as I usually am with the Obama Administration, I have to give the Obama team credit for being squeaky clean. I am reminded of just how scandal-free this administration is every time the Republican Party and its message machine start beating their chests about some make-believe scandal such as Benghazi; secret Muslim; born in Kenya; the IRS targeting political groups; death panels; Obamacare’s killing of 2.3 million jobs; and now risk corridors leading to insurance company bailouts. Those willing to do the most basic of research will find that with each of these supposed scandals, there is little to no wrongdoing on the part of President Obama or his administration. That Republicans obsess over these contrived scandals demonstrates to me just how scandal-free Obama’s Administration has been. These Fantasyland scandals are really the best the GOP can come up with. Way to go Obama. Sincerely. Way to give the Right virtually nothing to work with.
The latest Obama “scandal” regarding risk corridors is among the Republicans’ most pathetic attempts to foment outrage among their Democrat-hating base. For those who are unfamiliar with the legislative creation known as “risk corridors,” let me provide some background.
Risk corridors are designed to solve the problem of insurance companies having a very difficult time accurately setting premiums under the Affordable Care Act. Congress knew insurers would have difficulty effectively setting premiums because no one had ever set health insurance premiums within any framework similar to the ACA’s healthcare exchanges—i.e., no one knew how many people would enroll or the amount of treatment these people would need. In such a system, it would be expected that many insurers would wait a few years to enter the exchanges until more information was learned, or the insurers would set their prices artificially high to ensure they did not lose money.
Risk corridors are a pretty clever way to solve these problems. They work by essentially telling insurers, “If you set your premiums too low and lose a lot of money, the federal government will reimburse you for much of your losses; but if you set your premiums too high and make a lot of money, you will need to reimburse much of it to the federal government” (For a handy chart on how this reimbursement works, go here). By saying this, risk corridors accomplish a few important things such as: (1) encouraging health insurers to jump right into providing healthcare coverage and providing no incentive for waiting a few years until more is learned about the population being served; (2) providing an incentive to health insurers to price their policies accurately as opposed to safely; and (3) giving a disincentive to insurers to cherry-pick only young and healthy insureds because doing so will result in having to reimburse the federal government. Together, these changes will increase competition among the insurance providers, thereby increasing consumer choice and lowering premiums.
It is also important to note that the ACA provides that these risk corridors will only exist for three years; the thinking being that after three years’ time, enough information will exist for health insurers to confidently and accurately set competitive premiums.
Risk corridors, it would seem, are a very good solution. Plus, it’s not like we don’t have any experience with these things. In 2003, when the Republican Party controlled everything—the House, the Senate, and the White House—Congress and President Bush authored, passed, and signed into law Medicare Part D. This legislation created something never before seen in American legislation: a risk corridor. The Republicans created the concept of risk corridors and placed it into the law. In 2003, however, risk corridors got little media attention and no complaints from any elected leaders, and understandably so.
Fast-forward to 2014 when we have a Republican Party controlled by know-nothings who celebrate and wallow in ignorance. The Right is now lying about how these risk-corridors work and have chosen to make this the latest issue on which to unmercifully attack President Obama. Conservative groups now refer to risk corridors as “bailouts,” and dishonestly accuse private insurance companies of “colluding with government to privatize the profits of the health insurance industry, while socializing the risk” (an outcome made impossible by the ACA). When conservatives speak of risk corridors, there is no admission that we can’t yet know for sure what will happen. When pressed, however, the Congressional Budget Office (a federal agency created by Congress in 1974 to provide non-partisan, reliable calculations of the federal budget) predicted in a report issued this month that the ACA’s risk corridors will actually earn $8 billion for the American taxpayer via health insurer reimbursements. Conservatives ignore the CBO, and even the possibility of the government breaking even or making money, and run with dishonest headlines like “The Health Insurer Bailout is Headed Your Way” and “Get Ready for the Obamacare Bailout of Insurance Corporations.” By the way, for that last title, I have to give props to that conservative writer for finding a way to roll into one headline the three words Americans hate most: “Corporations,” “Insurance,” and “Bailout.”
I read these insane right-wing articles and like to assume they are so ridiculous they pose no threat because no one is reading them outside of a few militia group members in northern Idaho. Unfortunately, that’s not the case. The intellectual depravity of these promulgators of ignorance extends a long ways and to millions of people. I observed this painful truth last Wednesday, February 5, as I watched Fox News’ “On the Record with Greta Van Susteren.” She had on the show Senator Marco Rubio (R-FL)—a person who’s intentional dumbing down of the electorate can only be matched by Senator Ted Cruz (R-TX). Senator Rubio is the national leader who has spearheaded the fight against the risk corridors, and even authored a bill in November to repeal the risk corridors from the ACA. He and Ms. Van Susteren had this unbelievable exchange on her February 5 show:
Ms. Van Susteren: “You can always tell—when some of these things—like the risk corridor—isn’t it written—that if by some wild chance a lot of healthy, young people signed up—many more than anyone expected—so they made a lot of extra money, the taxpayers wouldn’t be getting any of that extra money on the back end? Isn’t that true?”
Senator Rubio: “Not only is that true, but a lot of this extra money you are talking about is money that is government money.”
If you can stomach the video, go here. The above conversation starts at 4:58.
As discussed above, Ms. Van Susteren is dead wrong. The taxpayers absolutely would get “extra money on the back end” if the insurers set their premiums too high. It boggles the mind how a person who has almost 2 million viewers a night and presumably a staff of researchers, can take the air with so little preparation on the topic she will be discussing with a United States Senator.
Worse yet, is Senator Rubio. While Ms. Van Susteren proved herself to be an incompetent fool, Senator Rubio almost certainly proved himself to be a liar. In his editorial in the Wall Street Journal of November 18, 2013, he wrote that risk corridors “can protect taxpayers.” He has been the lead cheerleader in getting attention brought to these risk corridors, and authored the bill in the Senate to repeal them, and now suddenly he is apparently playing so dumb that he cannot explain the most basic workings of a risk corridor. Senator Rubio’s dishonesty and cynicism is breathtaking.
With each new Republican-contrived Obama scandal we learn just how scandal-free this Administration is and the sorry, sorry state of today’s Republican Party. The real scandal is just how dishonest the organized Right has become and how it lacks any meaningful faction capable of acting as a conscience.
– Dylan
TheBlueBrothers 