Health reform implementation

House Republicans eye repeal of ObamaCare ‘bailout’ in debt-limit bill

CAMBRIDGE, Md. – House Republicans are considering attaching a provision that would prevent a “bailout” of insurance companies under ObamaCare to a one-year increase in the debt limit.

{mosads}The Republican conference met behind closed doors Friday on the final day of their annual retreat to hash out a plan for raising the debt limit, which the Treasury Department says must happen within a month to avoid a first-ever default.

The House Republican leadership has not settled on a plan, but an idea that gained support during the meeting, according to a person in the room, was to repeal the so-called “risk corridors” provision in the healthcare law, which Republicans have labeled a potential bailout of insurance companies.

Conservatives have mentioned the risk corridors provisions repeatedly in recent weeks in connection with the debt limit, as Republicans seek legislation that could win some Democratic support.

The party has largely abandoned hopes of gaining a major concession from Democrats in exchange for raising the debt limit now that President Obama has vowed never to negotiate over the issue again.

Majority Leader Eric Cantor (R-Va.) led the debt-limit discussion and said the leadership wanted a plan that could win 217 Republican votes and avoid the possibility of the House having to swallow a “clean” increase from the Democratic-led Senate, the source said.

Speaker John Boehner (R-Ohio) has lowered expectations for the debt limit, saying Republicans did not want to default and that the options had “narrowed” given President Obama’s stance and his unwillingness to accept major entitlement reforms without tax increases.

During the meeting, Boehner was asked about the size and duration of the debt-limit hike. He said it would likely last about a year, which would extend beyond the November midterm elections, the source said.

Targeting the risk corridors provision in the debt-limit bill gained the most support, although members brought up other ideas, including a provision on the Keystone pipeline. Party leaders were encouraged to hear support from members who have often voted against debt-ceiling increases that did not have major provisions, in particular Rep. Michele Bachmann (R-Minn.), the source said.

The leadership wants to move “sooner rather than later,” but there was no timetable given for a decision.

Democrats have warned Republicans against attaching any controversial provisions to a debt-ceiling increase.

“The more time Republicans spend dreaming up their latest debt limit wish list, the closer they are pushing workers and the economy toward another completely unnecessary crisis,” Sen. Patty Murray (D-Wash.) said Friday in a statement. “The American people are sick and tired of Republicans playing games with our economic recovery and Democrats have made it clear that Republicans don’t get to demand a ransom simply for allowing Congress to do its job.”

The healthcare law creates a temporary pool of money to pay insurers who enroll a higher-than-expected number of sick patients through 2016. The law transfers the money from lower-risk plans to higher-risk plans to keep premium prices stable.

The insurers will fund some of the payments, as the law requires companies with better-than-expected results to contribute to the pot. But Republicans say the government is likely to be on the hook for some of the payments, which they say would be tantamount to a taxpayer bailout of the insurance industry.

They also say the provision gives the Obama administration too much leeway to reimburse insurers.

Sen. Marco Rubio (R-Fla.) and Rep. Tim Griffin (R-Ark.) are behind bills to repeal the “risk corridors” provision of the law.

The risk corridors were put in place for the first three years of ObamaCare to cushion the blow for health insurance companies whose costs might rise more than expected in the early stages of the healthcare law.

Defenders of the “risk corridors” say they are necessary to ensure stable pricing on the exchanges in case too few healthy people sign up in the first year. Supporters also note that the pool of funds will only last through 2016, and that the government stands to make money if the enrollment results are better than expected.

Absent the risk corridors, insurers stuck with high-risk consumers might drop out of the exchanges, or raise premiums to make up for losses.

The insurance industry would furiously oppose any attempt to abolish the risk corridors and is on high alert.

BuzzFeed obtained a letter from Blue Cross Blue Shield CEO Scott Serota, in which he said the repeal “jeopardizes the entire private health insurance market.”

“We are becoming increasingly concerned about momentum that is quickly building among some leading conservatives for elimination of the risk corridor and reinsurance programs,” Serota wrote.

The risk corridors were inserted into the law to assuage the concerns of insurers, who have long expected early enrollees in ObamaCare to skew sicker. Absent the risk corridors, insurers stuck with high-risk consumers might drop out of the exchanges, or raise premiums to make up for losses.

Jonathan Easley contributed.

Tags Boehner Eric Cantor John Boehner Marco Rubio Michele Bachmann Patty Murray Tim Griffin
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