Insurance Companies Warn Against Limits on Health Care Bailouts
Washington, D.C. Becomes First Jurisdiction to Adopt New Health Care Tax
(Washington, D.C.) – The Affordable Care Act (ACA), also known as Obamacare, includes provisions that use federal funds to compensate insurance companies who may wind up losing money on the policies they sell. Many Members of Congress have called for legislation to repeal these bailouts, but the administration has thus far opposed all legislation to amend the health care law. Additionally, President Obama has proposed $5.5 billion for these bailouts in his 2015 budget.
The country's leading insurance companies recently wrote to the Obama Administration in opposition to a proposed regulation to limit total bailouts. They argue that expected premium increases will be even higher if there are limits on the level of taxpayer funding they can count on. This week, Washington D.C. became the first jurisdiction to impose its own local tax to pay for a faltering Obamacare exchange. The tax will be imposed on insurance plans outside the D.C. exchange, in order to moderate the premium increases on those buying plans in the city's exchange.
Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:
“The central promise of the new health care law is that care will be affordable. But instead of the promised $2,500 rate reduction the President promised American families, premiums are still rising. And while supporters of the law have been unwilling to acknowledge it, the new system includes a multi insurer bailout. Now the companies participating in the system insist that if that bailout is limited, they may well be forced to raise premiums even more. And one jurisdiction has decided – after only 1 year under the new system – to raise taxes to pay for it. How many other states will follow?
It is time to stop trying to fix this law with a series of patches, new regulations, and tax increases. The higher premiums, limited choices, and narrower provider networks are the result of costly and burdensome new regulations. The answer is not more government regulations. It’s far past time to put consumers and patients in charge of their health care – and to empower families to make choices for themselves.”