Bail-out of the Insurance Industry?

The Huffington Post has a nice Wendell Potter article addressing how exactly we “bail out” the insurance industry. 

The Pot Is Calling the Kettle Black in This Feigned Obamacare Outrage

Here are the highlights:
… In many cases, insurers refused to sell coverage at any price to prospective customers with preexisting conditions. That’s a big reason why the number of uninsured Americans had reached nearly 50 million when Congress passed the reform law.
So it wasn’t the least bit surprising that the first few million who have signed up for coverage since the exchanges opened on Oct. 1 skew older than many expected. People who have been denied coverage for years are far more motivated to get insurance …

In anticipation of this, drafters of the reform law established a $25-billion risk fund to insulate insurers from big losses during the first three years…

Yes, $25 billion is a lot of money, but it is pocket change compared to the enormous amount of taxpayer dollars that have been flowing to private insurance companies for nearly three decades to keep them in the Medicare Advantage program, which has had the unwavering support of Republicans…

We’re talking a lot of money here. In 2012 alone, the GAO calculated that the federal government spent about $135 billion on the Medicare Advantage program….

Interestingly, but not surprisingly, there was no mention of that, or any reference at all to the Medicare Advantage program, the biggest champion of which are Republicans, in The Weekly Standard‘s “bailout” story last week. If they are sincere in their alarm that Obamacare might reward private insurers with an extra $25 billion between now and the end of 2016, they should be apoplectic about the ongoing bailout known as the Medicare Advantage program.

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About D. Posnett MD

Emeritus Prof. of Medicine at Weill Cornell Medical College
This entry was posted in ACA, Health Care and tagged , , , , , , . Bookmark the permalink.

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