Topics: Obamacare

It's not an insurance bailout! It's just sticking taxpayers with corporations' losses!

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Beltway Confidential,Opinion,Timothy P. Carney,Obamacare,Health Care

Democrats desperately need to paint themselves as the party of the people, taking on the plutocrats. To pass Obamacare in 2009 and 2010, the White House decided it needed to paint insurance companies as the enemy.

So that makes it awkward that Obamacare is going to take money from taxpayers and give that money to insurance companies to cushion the companies' losses.

Sen. Marco Rubio, R-Fla., has proposed a bill to prevent this bailout. The Left's response: to scream "liars!" To shout to all heaven that reimbursing insurance companies that end up taking heavy losses isn't a bailout -- and that anyone who says it is a bailout is a horrible liar.

Here's liberal reporter Brian Beutler working his Salon readership into a lather over Republicans' talking about Obamacare's "risk corridor" provisions, using the headline "GOP's apocalyptic new debt limit strategy: One enormous lie":

[C]onservatives agreed, in an unusually brazen and public way, that they would lie about that provision and dub it an “Obamacare bailout.” ...

... in a cynical campaign to build support for its repeal and, as Ramesh Ponnuru wrote, in mustache-twiddling prose. ...

But for anyone reading who isn’t in the business of laying fraudulent intellectual groundwork for partisan campaigners, you can be absolutely secure in the conclusion that this is a huge scam ... they’re lying.

The substantive argument that forcing taxpayers to share companies' unexpectedly large losses can't possibly be called a "bailout"?

As best as I can tell it's this: Risk corridors were built on the assumption they would be cost neutral, and mostly transfer money from super-profitable insurers to unprofitable ones.

But what about the fact that now we expect risk corridors, next year, to be definitely NOT cost-neutral? And that next year, they will transfer money from taxpayers to insurers?

Doesn't that mean that, for next year at least, the risk corridor provisions are a bailout?

I agree that "bailout" is sometimes overused. Maybe liberals would be happier if we called this payment to insurers a "safety net" for insurers. Or "welfare." Is there a name for welfare we give to corporations?

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