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Tuesday, 03 December 2013 15:43

Healthcare Bailout on the Way

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In an attempt to salvage the failed launch of the healthcare law, President Obama is planning an event at the White House in which he will ask hand-picked Americans to go on display to illustrate the alleged benefits of the healthcare law. And in case that does not do a sufficient job of undoing the damage that the healthcare law has done to Obama’s reputation, the White House is laying out plans to bail out insurance companies to help offset the loss of revenue and profit that the industry is experiencing under ObamaCare.

The White House is turning to a rather hidden provision in the healthcare law to prepare a bailout that the administration hopes will help address the industry’s outrage over the administrative failures.

Townhall reported, “A ‘risk corridor’ provision in Obamacare allows the federal government to give health insurers a taxpayer bailout if the cost of providing care for those insured through Obamacare is higher than insurers originally estimated when they first set premium prices.”

Federal regulations originally allowed insurers access to bailout funds only after they spend $60,000 on an individual, but on Monday, the Department of Health and Human Services introduced new regulations lowering the limit to $45,000.

The Department of Health and Human Services has the power to use taxpayer money to reimburse insurance companies up to 80 percent of their additional cost in the first three years of the law’s existence. Americans for Prosperity’s website explained, “If the cost of insuring individuals under the PPACA is 3% higher than estimated, insurance companies receive a 50% taxpayer reimbursement of the difference. If the cost of the ACA is 8% higher than estimated, which is a significantly more likely outcome, insurance companies receive an 80% taxpayer reimbursement. This bailout of insurance companies could end up costing taxpayers billions of dollars.”

In the notice published Monday in the Federal Register, the Obama administration acknowledges that insurers have valid concerns when they observe that they may be saddled with sicker customers that cost more money in the new insurance exchanges because healthier Americans will likely be staying on their existing health plans for another year.

The botched healthcare website, failed rollout of the law, and the lack of younger and healthier Americans buying into the exchanges, along with expensive premiums, have ultimately resulted in just 100,000 individuals signing up through the exchanges, most of whom are older and sicker. That will dramatically increase the cost of premiums.

Fox News reported that the regulatory filing “blames the bailout on President Obama’s sudden reversal of his long-planned regulations forcing insurers to cancel millions of policies. Obama nixed his rules after a public backlash over his misleading promise to voters in 2012 about keeping their insurance policies and doctors.”

Significant backlash over the cancellation of insurance policies compelled President Obama to announce on November 14 that he would be waiving some requirements of the new federal law and permit insurers to renew “current policies for current enrollees” for a year.

Fox News explained, “The announcement was made in response to the millions of people receiving cancellation notices — but industry representatives raised concern that if they offer the old plans again, premium revenue could go down.”

Insurers are criticizing the president’s move asserting it will upset the assumptions on which they set premiums for insurance products in 2014.

The American Academy of Actuaries released a statement that indicates the president’s plan to reverse the health insurance cancellations “could lead to negative consequences for consumers, health insurers, and the federal government.” The statement adds, “Costs to the federal government could increase as higher-than-expected average medical claims are more likely to trigger risk corridor payments.”

Additionally, the healthcare.gov website continues to experience major problems, and there are significantly fewer new customers than the administration had originally hoped.

An official with the Centers for Medicare and Medicaid Services referred to the risk corridor program last week as a means to help insurance companies.

Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, said in a letter to insurance commissioners that the program "should help ameliorate unanticipated changes in premium revenue" and that the government is looking at ways to modify the rules "to provide additional assistance."

Republicans have been preparing for such a move, however. Senator Marco Rubio of Florida has a bill on offer in the Senate that would prevent “insurance bailouts.”

Rubio along with a half dozen other senators — 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.) — introduced the “Obamacare Taxpayer Bailout Prevention Act” on Tuesday that would strip a provision in the Affordable Care Act related to the risk corridors.

According to Rubio, the risk corridors serve as a “blank check” for the healthcare industry.

In an opinion piece written by Rubio, he explained that risk corridors could be structured so as to protect taxpayers, but the healthcare law provision did “no such thing.”

“The idea that the federal government should be bailing out insurance companies in order to make Obamacare work, that’s not something a lot of people are aware of,” Rubio told Fox News. “And I haven’t taken a poll on it, but I guarantee you it would be hugely unpopular.”

Robert Zirkelbach, spokesman for America’s Health Insurance Plans, has emphasized that the three-year program is just temporary and that it is not entirely out of the ordinary for new laws. "There's a lot of uncertainty about what the markets are going to look like," he said, noting the payments are designed to help stabilize the market.

However, it is not likely that Senate Majority Leader Harry Reid would allow a vote on the legislation.

Townhall observed that the Congressional Budget Office had not considered bailouts when calculating the cost of ObamaCare, and that if the bailout proceeds, the healthcare law will add billions to the deficit.

Rubio submitted a letter to the Congressional Budget Office asking for a cost estimate for the program. "It is clear that the risk corridors' only purpose over the next 3 years will be to serve exclusively as a taxpayer bailout mechanism for health insurance companies," he wrote.

President Obama told insurance executives last week that the government’s assistance to the insurance companies will be limited. But as noted by Rubio, “President Obama’s November 14 decree can only be implemented if the American taxpayer provides a bailout safety provision funded on their dime.”

 

3 comments

  • Comment Link Heidi Preston Tuesday, 03 December 2013 23:28 posted by Heidi Preston

    Links to the Evelyn Rothschild interview, the bondholders of Ireland bank (which Rothschild and Compagine Gestion and Royal London Asset Management among a whole list of other names are credited on)
    http://order-order.com/2010/10/15/anglo-irish-bondholders-should-take-the-lossesis-the-ecb-forcing-ireland-to-protect-german-investments/

    Youtube- Rothschild bashing United States about banks and financial structure of Ireland...Gordon Brown complimented for fast action to take on Nationalizing the Banks..the Irish banks are to big for the country and shouldn't have gotten themselves into this situation....confidence factor is in the one who holds the wealth!
    http://www.youtube.com/watch?v=TbRO9LShO-Y

  • Comment Link Heidi Preston Tuesday, 03 December 2013 23:14 posted by Heidi Preston

    Problem-Healthcare bubble (mandatory health insurance and no money to pay it).

    Solution: Bigger Capital Base (according to Evelyn Rothschild the wealthiest person around suggested this for the Ireland bailout).

    during an interview-
    1." have you looked at the problems of the United States, have you looked at how many of the States of the United States are bankrupt, compared to what happened in Europe" ...."they don't want to deal with this subject."..."French and United States are two of the most protectionist countries" (clarifies speaking in financial structure terms not any other)."

    2. Europe has the EU is he suggesting we get a NU with Mexico, Canada and United States, to secure a "bigger capital base"? Where would this expansion of capital base structure come from?

    Interesting comments considering where Ireland got it's money from and looked what happened with such a broad capital base....

    "Of the 80 listed companies only 7 listed their business as dealing with pensions and being a cooperative savings institution. Of those, only 4 listed churches and unions as their clients, the others could well have been big pension funds. The churches and unions in question were in Germany not Ireland. Those seven companies are amongst the smallest of Anglo Irish’s bond holders. I only have figures for four of the seven. The largest, Union Investments of Germany, has a mere €165 billion in assets under management.
    The total assets under management which I was able to compile from publicly available figures is €20,871,150,000,000. That is an underestimate because the bond holders who turn out to be Private and Swiss banks don’t publish any figures. So Anglo Irish’s ‘bond holders’ hold and invest MORE than 20.8 trillion euros. Guido lists those bond holders as holding between them 4 Billion euros in Anglo Irish bonds.
    Now, in my opinion both figures are likely to be wrong. Certainly my figure is a large underestimate. But taking them at face value Anglo Irish would account for an one 5000th of the total assets being managed by all the bond holders. So would even a total default by Anglo Irish cause that much, let alone systemic, pain and risk? Why are the ‘Bond holders’ and the Irish government so concerned that the Irish people be forced to take the loss and pay the debts for them?
    Now lets look at the other side of the equation, at Ireland itself. Well Ireland’s GDP before the crash, in 2008, was … drum roll please… €207 billion. Or 0.207 trillion.
    SO…. on one side we have Ireland whose bond holders, its people, have between them a total GDP wealth of 0.207 trillion euros. Who are being FORCED, against their will, to pay Anglo Irish bank’s debts to its bond holders, who between them hold 20.8 Trillion euros. The people of Ireland are paying to, and protecting the wealth and power of, people who have 100 times more wealth!
    So where do these wealthy bond holders live and work?
    Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.
    France is next with 10 bond holders. Who have about 4 trillion to keep them warm.
    Britain is third with 9 who have around 3 trillion.
    The Swiss have 6 but who have about 8.5 trillion.
    America has only three and hold only a trillion.
    Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.
    All these figures are very rough. The figure for Switzerland is certainly under because Private Swiss Banks just don’t publish figures. What we can say for sure, figures or no figures, is these are not banks investing widow’s pensions or orphan’s pennies.
    So who are they? Well many of the bond holders are privately held banks, which list their activities as asset management for off-shore, non-resident and high value individuals. To give you an example, one of the private banks is EFG Bank of Luxembourg. EFG stands for European Financial Group which is the third largest private bank group in Switzerland. It manages over €7.5 trillion in assets. It is ‘mostly’, 40%, owned by Mr Spiro Latsis, son of a Greek shipping magnate. He also owns 30% of Hellenic Petroleum. His personal fortune is estimated to be about $9 Billion.
    Now there is absolutely no suggestion that Mr Latsis has ever done anything wrong or illegal. And his holdings are, I am quite sure, perfectly legal and above board. But when we talk of Anglo Irish’s bond holders it is Mr Latsis and those with his sort of wealth who we are talking about NOT widows and orphans or you and me. It is therefore worth remembering, the next time an Irish politician, or any of our politicians for that matter, say that some welfare payment can no longer be afforded, it is because the money that could have paid for it has been given instaed to the bond holders, people not unlike Mr Latsis. The Irish people are paying and protecting the interests of people like Mr Latsis over the interests of their own children. And it is their own politicians who have arranged this.
    Other bond holders call themselves ‘asset management’ firms. The fifth largest asset management firm in the world is one of the bond holders. Others are insurance companies. The 6th and 9th largest in the world, to be specific. Others are the largest banks, Deutsche, Soc Gen, Barclay’s, PNB Paribas, UniCredit (who don’t appear on the list but own Pioneer Investments) and Wells Fargo (also not on the list but who own European Credit Management). Then there is Goldman. No show without the squid.
    Kleinwort Benson Investors is a bond holder. But Kleinwort is owned by a Belgian holding company, RHJ which is part owned by Mr Timothy Collins. Mr Collins also sits on the board of Citigroup. So he too is one of the bond holders the Irish people are ‘helping’.
    Finally, a very large number of the banks who are Anglo Irish’s bond holders, are members of something called the Euro Banking Association. All the large European banks, most of the large US ones, Swiss, Japanese, Nordic and some Chinese, are members. The chairperson is Mr Hansjorg Nymphius of Deutsche Bank. Other board members are from JP Morgan Chase, RBS, Bank of Ireland, West LB(bankrupt), BNP Paribas, ABN Ambro, Dexia and Banco Santander.
    Its a list which could double as the list of Anglo Irish’s bond holders. The EBA was set up in Paris in 1985, since when it has been and is, central to promoting European Union financial integration and the area’s banking interests. The EBA has close ties to the ECB.
    I will leave you to digest this disgusting bolus of self serving wealth protection.
    The only thing left to say is this. The bond holders of Anglo Irish are a very good guide to the identity of the bond holders of ALL OUR BANKS. The bond holders being protected, in every nation, on the advice of the banks and financial class, are THE BANKS AND THE WEALTHIEST OF THE FINANCIAL CLASS.
    THEY are screwing YOU! -----By Golem XIV on October 17, 2010

    yeah...oh what a tangled web we weave when expansion of the capital base is good to believe. lol

  • Comment Link Terrance Ferebee Tuesday, 03 December 2013 19:50 posted by Terrance Ferebee

    Classic fascism

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