3 Questions Congress Should Answer Before Bailing Out Obamacare

From The Daily Signal.com (Mar. 13):

Republicans fear that insurance companies will, once again, announce large premium increases for Obamacare coverage this fall—just before November’s elections. Apparently, congressional Republicans are being persuaded by industry lobbyists that they can “buy down” premiums by giving insurers billions of dollars in taxpayer money.

When a crowd starts panicking, the best response is to remain calm and assess the situation before taking any action. To that end, here are three questions for Republican lawmakers.

1. How likely is it that there will be large premium increases this fall if Congress doesn’t give insurers a bailout?

The investment disclaimer that “past performance is no indicator of future results” applies whether the past performance was good or bad, and it applies in this situation as well. Obamacare’s past experience has certainly been bad, but that does not automatically mean it will get substantially worse in the future.

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2. What guarantees do you have from insurers that if you give them a bailout, they will lower their premiums—and by how much? If you think higher premiums are a political liability, how will you look to your constituents if you vote to bail out insurers now, and then come October, they hike their premiums anyway?

Remember, despite the law funneling $20 billion in “temporary reinsurance” subsidies to insurers during the first three years of Obamacare (2014 through 2016), premiums still escalated.

By waiting until insurers submit their 2019 premium requests, Congress would at least then have a factual basis for asking insurers and state insurance regulators—in public hearings—to quantify the effect that any proposed changes in federal policy or funding will have on next year’s actual premiums.

If Congress acts now, it would just be throwing more tax dollars into the unknown in the hope that it will have some positive effect.

Even most racetrack wagers offer better odds than that.

3. What do your constituents who are most upset about high Obamacare premiums think of the idea?

Keep in mind that the people who would primarily benefit from a reduction in premiums are those buying coverage without any Obamacare premium subsidies.

They are your middle-class constituents who are self-employed or own small businesses. What do they think? Are they still buying Obamacare plans, or have they already abandoned the Obamacare market?

How much would premiums have to drop before they would come back? Understandably, they have been the biggest supporters of “repeal and replace.” Have they now changed their minds to favoring “bail out and prop-up?”  [read more]

Good questions for the Congress.