Rubio Introduces Bill to Prevent Obamacare ‘Bailout’

WASHINGTON, DC - MARCH 22: U.S. Sen. Marco Rubio (R-FL) talks to reporters on Capitol Hill March 22, 2013 in Washington, DC. The Senate is scheduled to vote on amendments to the budget resolution on Friday afternoon and into the evening. (Photo by Drew Angerer/Getty Images)
National Journal
Nov. 19, 2013, 4:21 p.m.

Sen. Marco Ru­bio, R-Fla., in­tro­duced le­gis­la­tion Tues­day to re­peal a less­er-known Obama­care pro­vi­sion called “risk cor­ridors” that pro­tects in­sur­ance com­pan­ies from po­ten­tial un­ex­pec­ted changes in mar­ket­place com­pos­i­tion.

The bill is a not-so-subtle at­tack on the health care law, as its im­ple­ment­a­tion would cause ser­i­ous dam­age to the in­sur­ance ex­changes.

The risk-cor­ridors pro­vi­sion is es­sen­tially a safety net for in­surers dur­ing the first three years of the law’s im­ple­ment­a­tion, de­signed to pro­tect the mar­ket­place as a whole if more ex­pens­ive pa­tients sign up than an­ti­cip­ated. In­sur­ance com­pan­ies set cost es­tim­ates ahead of time. If costs end up be­ing high­er, the gov­ern­ment pays part of the dif­fer­ence; if costs are lower, the in­sur­ance com­pany pays the gov­ern­ment.

Ru­bio’s bill, which he dubbed the Obama­care Bail­out Pre­ven­tion Act, would elim­in­ate risk cor­ridors al­to­geth­er.

“[The bill] will en­sure the Obama ad­min­is­tra­tion doesn’t have un­ac­count­able blank-check-writ­ing au­thor­ity to bail out in­sur­ance com­pan­ies at the ex­pense of tax­pay­ers,” Alex Con­ant, a spokes­man for Ru­bio, wrote in an email. “Ru­bio’s bill will fully re­peal the risk cor­ridor pro­vi­sion in Obama­care, pre­vent­ing a bail­out un­der the ex­ist­ing risk cor­ridor pro­vi­sion of Obama­care.”

The risk-cor­ridors pro­vi­sion has at­trac­ted more at­ten­tion re­cently, fol­low­ing the an­nounce­ment of Pres­id­ent Obama’s in­sur­ance can­cel­la­tion ‘fix,’ which would al­low in­surers to ex­tend policies that do not com­ply with the Af­ford­able Care Act for an­oth­er year.

“When Obama­care was de­bated and passed in 2009 and 2010, none of its pro­ponents, in­clud­ing the pres­id­ent, told the Amer­ic­an people that the law gran­ted the fed­er­al gov­ern­ment the au­thor­ity to bail out in­sur­ance com­pan­ies at the ex­pense of tax­pay­ers,” Ru­bio wrote in an op-ed in The Wall Street Journ­al on Tues­day. “But now their dirty little secret is out, and it should be wiped out from the law.”

However, the risk-cor­ridors pro­vi­sion is im­port­ant for avoid­ing the so-called “death spir­al” of high costs and low par­ti­cip­a­tion that could jeop­ard­ize the law. A lack of risk pro­tec­tion could cause in­surers to stop par­ti­cip­at­ing in the ex­changes, or raise their premi­um rates.

The pres­id­ent has already told in­surers that the ad­min­is­tra­tion’s as­sist­ance for them will be lim­ited.

The pro­posed le­gis­la­tion is sure to at­tract some Re­pub­lic­an sup­port, and has already got­ten the back­ing of nu­mer­ous con­ser­vat­ive or­gan­iz­a­tions, in­clud­ing Freedom­Works, Her­it­age Ac­tion, and Amer­ic­ans for Tax Re­form.

The bill is co­sponsored by Sens. Saxby Cham­b­liss, R-Ga.; James In­hofe, R-Okla.; Mike Lee, R-Utah; Mitch Mc­Con­nell, R-Ky.; Rand Paul, R-Ky.; and Dav­id Vit­ter, R-La.

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