House panel: O-Care 'bailout' could cost $1B this year alone

An ObamaCare revenue-sharing program amounts to a taxpayer bailout of insurance companies, the chairman of a House Oversight subcommittee said Wednesday, adding the bill could run more than $1 billion just in 2014.

Rep. Jim JordanJames (Jim) Daniel JordanRepublicans and Democrats alike face troubling signals from voters Ex-OSU wrestler walks back accusations against Jordan: I don’t know if he 'directly' knew about abuse GOP chairman readies Steele dossier subpoenas MORE (R-Ohio), chairman of the Economic Growth, Job Creation and Regulatory Affairs panel, disputed a previous Congressional Budget Office (CBO) report that the risk corridors would cost the government nothing.

“The American people have a right to know how much these backdoor bailouts will cost,” Jordan said. “While I have great respect for the analysts at CBO, their findings in this area did not square with the evidence presented by numerous health policy experts.”

The Temporary Risk Corridors Program was set up under the Affordable Care Act (ACA) to distribute funds from insurers with healthier, less expensive consumers to those with sicker, more costly enrollees.

The program is intended to spread the cost of risk in the early stages of the new healthcare law.

Based on the committee’s own research of 15 traditional insurers and 23 ObamaCare co-op insurers, Jordan said companies expect to get nearly $730 million from the corridor.

“The information provided by the insurers suggests that the total taxpayer bailout could well exceed $1 billion this year alone,” he said.

Democrats on the panel disagreed with Jordan’s characterization and said it was only the latest attempt to falsely criticize the ACA.

“Republicans continue to inaccurately describe these risk-mitigation mechanisms as a bailout to health insurance companies,” said Rep. Matt CartwrightMatthew (Matt) Alton CartwrightElection Countdown: Senate, House Dems build cash advantage | 2020 Dems slam Trump over Putin presser | Trump has M in war chest | Republican blasts parents for donating to rival | Ocasio-Cortez, Sanders to campaign in Kansas Unions aren’t a thing of the past. Unions are our future. More than 50 Dem House challengers outraise GOP incumbents MORE (D-Pa.), ranking member on the subcommittee. “This characterization is just plain wrong.”

Cartwright notes the funds to pay for the risk corridor are only pulled from insurers who participate in the federal and state healthcare exchanges, and are distributed based on risk taken on by individual insurers.

“The reinsurance pool amount is set by statute, and payments may not exceed the amounts collected from insurers,” he said. “In April, the nonpartisan Congressional Budget Office confirmed that the risk corridor program would be budget neutral over the three-year life of the program. None of these facts sound like a bailout to me.”

Senate Budget Committee Chairman Jeff SessionsJefferson (Jeff) Beauregard SessionsHouston restaurant shuts down social media after Sessions photo backlash ACLU’s lawsuit may force Trump to stop granting asylum applications US judge rejects Russian company’s bid to dismiss Mueller charges MORE (R-Ala.) told the panel Wednesday that the Obama administration’s plan to pay for the corridor through the Centers for Medicare and Medicaid Services is unlawful.

Sessions and Rep. Fred Upton (R-Mich), chairman of the House Energy and Commerce Committee, recently wrote a letter to Health and Human Services Secretary Sylvia BurwellSylvia Mary Mathews BurwellPrice was a disaster for HHS — Time for an administrator, not an ideologue Overnight Healthcare: GOP chairman to introduce pre-existing condition bill ObamaCare enrollment hits 11.5M for 2017 MORE raising the same concern.

Sessions argued that while the law allows the administration to collect money for the risk corridors, it does not stipulate who has authority to redistribute the funds.