Republicans question health reform law's insurance pools

House Republicans with oversight powers are hammering the Obama administration for its handling of two temporary insurance pools created by the new healthcare reform law.

One pool, which helps organizations with the cost of insuring early retirees, amounts to corporate welfare, the GOP charged Friday morning. The other, which offers coverage to individuals with preexisting conditions, is costing too much to cover too few individuals, Republicans say.

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During an Energy and Commerce oversight hearing Friday morning, Republicans lashed out at a new Obama administration report detailing $1.3 billion its given out to corporations, unions and state governments to help cover the cost of early retiree insurance. They are taking particular issue with the $36 million given to General Electric, which has come under fire for recent reports that it avoided income taxes in 2010.

“Shouldn’t they have the responsibility of taking care of that themselves?” asked Rep. Cliff Stearns (R-Fla.), who heads the oversight subcommittee. “We’re basically giving them free money.”

The report reveals hefty payouts to other major corporations and unions — $202 million for the United Auto Workers, $140 million for AT&T and $92 million for Verizon.

Republican attacks on the program put Democrats in the politically unfamiliar position of defending government assistance to big corporations.

“If there is a way [Republicans] suggest we can get GE and AT&T to cover those people, I welcome that,” said Rep. Jan Schakowsky (D-Ill.). “Until that point, we’re not going to set those employee adrift with no healthcare coverage.”

More than 1,300 employers have been awarded nearly $1.8 billion in reimbursements to cover the health insurance costs for early retirees. Defenders of the healthcare reform provision say it’s necessary because individuals just younger than the retirement age typically have trouble obtaining insurance in the individual market.

The Department of Health and Human Services (HHS) announced Thursday night the $5 billion program would stop accepting applicants within weeks, well ahead of the program’s 2014 sunset date.

“The early retiree reimbursement program has been an incredibly successful program in accomplishing goals it set out to accomplish,” said Steve Larsen, who oversees insurance market reforms for HHS.

Meanwhile, Republicans are also criticizing the Obama administration for spending too much money on a $5 billion insurance pool for individuals with preexisting conditions that has been plagued by low enrollment.

Just more than 12,000 people of the millions eligible have signed up so far, falling far short of projections that 375,000 would sign up by the end of 2010. Larsen told the oversight subpanel that HHS has spent almost $100 million in the first few months of the program.

Rep. Michael Burgess (R-Texas) said the low participation questions the need for the high-risk pools.

“It begs the question: Was this a proper path to take?” Burgess said.

Larsen defended the low enrollment, saying it typically takes time to build up momentum for new insurance pools.

Like the early retiree fund, the high-risk pools will be retired in 2014 when individuals can purchase health insurance on new state-run health insurance exchanges and insurance companies will be banned from discriminating against preexisting health conditions.