{"id":21611,"date":"2014-10-03T11:24:39","date_gmt":"2014-10-03T15:24:39","guid":{"rendered":"http:\/\/cfif.org\/v\/freedom_line_blog\/?p=21611"},"modified":"2014-10-03T11:24:39","modified_gmt":"2014-10-03T15:24:39","slug":"obamacare-nearing-a-fannie-and-freddie-style-bailout-of-insurance-companies","status":"publish","type":"post","link":"https:\/\/cfif.org\/v\/freedom_line_blog\/21611\/obamacare-nearing-a-fannie-and-freddie-style-bailout-of-insurance-companies\/","title":{"rendered":"ObamaCare Nearing a Fannie and Freddie-Style Bailout of Insurance Companies?"},"content":{"rendered":"<p>Could ObamaCare\u2019s <a href=\"http:\/\/cfif.org\/v\/freedom_line_blog\/21601\/gao-says-cms-lacks-authority-to-bail-out-obamacare-insurers\/ \" target=\"_blank\">\u201crisk corridor\u201d program<\/a> become the health insurance industry\u2019s equivalent of Fannie Mae and Freddie Mac \u2013 the federally funded entities that spent $180 billion bailing out banks who issued subprime mortgages?<\/p>\n<p>Stephen Moore, the <a href=\"http:\/\/www.heritage.org\/about\/staff\/m\/stephen-moore \" target=\"_blank\">chief economist at the Heritage Foundation<\/a>, thinks so.<\/p>\n<p>\u201cBut insurance experts warn that [the risk corridor] program creates the same moral hazard problem for health insurance that we saw in the mortgage market with Fannie Mae and Freddie Mac,\u201d <a href=\"http:\/\/news.investors.com\/politics-obamacare\/100114-719719-obamacare-risk-corridors-a-taxpayer-bailout-for-insurers.htm?ref=HPLNews \" target=\"_blank\">Moore writes<\/a> at Investor\u2019s Business Daily. \u201cThe guarantee on bad mortgages encouraged bad mortgages. The guarantee against losses on ObamaCare enrollees encourages insurers to toss sound underwriting standards out the window. This didn\u2019t turn out so well with Fannie and Freddie, which received a taxpayer-funded bailout of more than $180 billion after issuing subprime mortgages that should never have been written.\u201d<\/p>\n<p>Moore goes on to say that surveys of health insurance companies selling plans on ObamaCare exchanges say that the vast majority expect to receive a payment from the federal government to cover their losses. Estimates for the first year near $1 billion. And, since there is no cap to how much the feds will reimburse, there is no limit to how much money a company can lose and still expect a check from Uncle Sam.<\/p>\n<p>Despite all this, the Obama administration is chugging ahead with plans to make payments under the risk corridor program without explicit congressional appropriations. Republicans are contesting President Barack Obama\u2019s authority to do this \u2013 with an assist from <a href=\"http:\/\/www.gao.gov\/products\/B-325630#mt=e-report \" target=\"_blank\">a recent GAO legal opinion<\/a> \u2013 but they should really train their fire on eliminating the risk corridor program as is. As with IRS tax credits, ObamaCare can\u2019t survive without a <a href=\"http:\/\/cfif.org\/v\/index.php\/commentary\/56-health-care\/2333-new-fed-court-strikes-down-key-obamacare-subsidy\" target=\"_blank\">convoluted shell game<\/a> that hides the true cost of health care.<\/p>\n<p>We\u2019ll never get health care policy right until we can talk honestly about how it\u2019s funded. Now would be a good time for the GOP to being that process.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Could ObamaCare\u2019s \u201crisk corridor\u201d program become the health insurance industry\u2019s equivalent of Fannie Mae and Freddie Mac \u2013 the federally funded entities that spent $180 billion bailing out banks who issued subprime mortgages? Stephen Moore, the chief economist at the Heritage Foundation, thinks so. \u201cBut insurance experts warn that [the risk corridor] program creates the [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1132,70,4579,2147,186,735,35,2249],"class_list":["post-21611","post","type-post","status-publish","format-standard","hentry","category-posts","tag-bailout","tag-budget","tag-cms","tag-gao","tag-hhs","tag-irs","tag-obamacare","tag-subsidy"],"_links":{"self":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/21611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/comments?post=21611"}],"version-history":[{"count":7,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/21611\/revisions"}],"predecessor-version":[{"id":21618,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/21611\/revisions\/21618"}],"wp:attachment":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/media?parent=21611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/categories?post=21611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/tags?post=21611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}