Congress May Protect Taxpayers from Insurance Company Bailout
(Washington, D.C.) – While the Affordable Care Act (ACA) includes provisions to bail out insurers who suffer losses on policies sold through the law's exchanges, Congress may soon vote to eliminate that taxpayer-funded subsidy. The president's most recent annual budget included $5.5 billion for these bailouts in the next year, and the White House rejected proposals to prevent taxpayer money from financing them. The provisions of Obamacare which protect against insurance company losses are intended to induce more companies to participate in the program – by eliminating the risk of financial losses and shifting them to the taxpayer. While the mechanism may also prevent even greater premium increases in future years, premiums for next year are nonetheless projected to increase again.
Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:
"The insurance company bailouts created under the health care law will cost billions annually – money that comes from the pockets of taxpayers and insurance buyers. This is simply wrong. In a free economy, companies that make bad bets in the marketplace can't expect to stick the taxpayers with their losses. They must be able to offer a quality product at competitive prices. That's the way that the vast majority of America's small business people operate, and there should be a level playing field for those who take part in the health care law as well.
This is yet one more broken promise – and one more way in which the law is costing Americans every day. Congress must begin to reform the reform. It's clear that the supporters of the law – who promised to fix it – are not doing so."