ObamaCare’s sunk: Time for a new ship
Back in 2010, ObamaCare was like the Titanic heading off on her maiden voyage. Critics warned people not to hop aboard, that disaster was inevitable. But the president, his allies in Congress and lots of big insurance companies assured everyone that they had designed an unsinkable ship of government-run health care.
Now, billions of dollars and 17 failed co-ops later, the captain and crew of USS ObamaCare are demanding that everyone stay below-deck and continue bailing out their sinking ship.
Congress shouldn’t oblige them. It’s time to head to the lifeboats.
The latest bailout proposal would extend a temporary provision of the Affordable Care Act.
The provisional Transitional Reinsurance Program, which took effect in 2014 and is scheduled to expire at the end of this year, imposes a contribution tax on employer-sponsored health plans. The proceeds are used to reimburse insurers offering ACA-compliant individual market coverage for taking on expensive, high-risk enrollees.
These corporate subsidies were originally meant to be a temporary fix while companies adjusted to a market with the federal government’s finger on the scales.
The authors of ObamaCare realized that because their bill created exchanges offering comprehensive and heavily subsidized individual coverage, people with expensive medical conditions would be motivated to seek such coverage in favor of their existing plans. The designers assumed that a little temporary support would handle the problem.
But ObamaCare set in motion much bigger and more costly consequences in the insurance market. Faced with mounting losses, more and more insurers are abandoning the exchanges.
And the problems aren’t confined to ObamaCare exchanges. People who buy individual insurance but don’t qualify for a subsidy are being hit with the full cost of premium hikes and facing decreased coverage choices as well.
For instance, Wellmark, the parent company of Blue Cross and Blue Shield of South Dakota — which has never participated in the exchanges — announced that it will also stop selling ACA-compliant individual market policies off the exchange.
It’s worth noting that Wellmark is a policyholder-owned company — the exact kind that ObamaCare tried to replicate through its now-failed co-op program.
The same politicians who rammed this doomed Titanic through Congress in the first place are now pushing to extend the reinsurance program.
Rather than try to prop up an ill-designed law, Congress needs to systematically repeal and replace ObamaCare’s dysfunctional policies with more sensible solutions.
There are other ways to ensure that needy individuals get the medical care they need without wrecking health insurance markets for everyone else. For example, several think tanks and lawmakers have proposed promising, free-market options.
As for the remaining insurers, rather than lobbying for short-term bailouts, they would be better off helping Congress design more workable replacement solutions for the long-term.
ObamaCare is sinking fast. We need to transfer the passengers to a safer, more seaworthy ship.
Jim DeMint is president of The Heritage Foundation.