Most Americans have seen the headlines about skyrocketing health-care premiums and insurers fleeing the individual marketplace—but few people understand why these things are happening. When you learn the story behind the trends, however, it’s hard not to wonder whether the Obama administration is deliberately sabotaging Obamacare.
The idea seems absurd until you examine how badly CMS, the Centers for Medicare and Medicaid Services, has administered a critical part of the law, the so-called premium stabilization programs. These programs were supposed to help the individual marketplace adjust to Obamacare’s new rules, and prevent the market from entering a “death spiral” of increasing premiums and fewer choices.
In other words, these were very important programs to get right. Unfortunately, the administration has botched almost all of them.
The Temporary Risk Corridors program, for example, was supposed to insulate insurers from the uncertainty they faced when setting rates in this new, unpredictable market. Insurers who set their premiums too low would have most of their losses subsidized by insurers who set them too high.
Repeatedly, CMS assured us that this program would be budget-neutral. Then, it suggested that taxpayer dollars could cover any deficits. Congress reacted to this bait-and-switch by inserting language into the appropriations bill expressly forbidding CMS from using taxpayer money for this purpose – essentially requiring CMS to live by its word.
The idea seems absurd until you examine how badly CMS, the Centers for Medicare and Medicaid Services, has administered a critical part of the law, the so-called premium stabilization programs. These programs were supposed to help the individual marketplace adjust to Obamacare’s new rules, and prevent the market from entering a “death spiral” of increasing premiums and fewer choices.
In other words, these were very important programs to get right. Unfortunately, the administration has botched almost all of them.
The Temporary Risk Corridors program, for example, was supposed to insulate insurers from the uncertainty they faced when setting rates in this new, unpredictable market. Insurers who set their premiums too low would have most of their losses subsidized by insurers who set them too high.
Repeatedly, CMS assured us that this program would be budget-neutral. Then, it suggested that taxpayer dollars could cover any deficits. Congress reacted to this bait-and-switch by inserting language into the appropriations bill expressly forbidding CMS from using taxpayer money for this purpose – essentially requiring CMS to live by its word.
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