For the most part, the insurance industry does not appear to have given a lot of political cover to the Obama administration’s signature health initiative, the Affordable Care Act.
Although most private insurers opted to participate in the private insurance exchange created by the ACA, they have complained loudly about the higher costs of providing coverage to millions of previously uninsured Americans and in recent months a number of the nation’s top insurers, including UnitedHealth, Aetna and Anthem, have indicated that they will either stop offering ACA plans in most states or will seriously consider doing so in the future.
But there is a big pot of Obamacare money that insurers want to get their hands on. That desire makes them allies of Democrats and ACA advocates, in some sense.
At hand is billions of dollars that the Centers for Medicare and Medicaid Services tried to pay insurers as part of the “reinsurance” program that was set up to help insurers absorb major losses in the first three years of the ACA.
The reinsurance program is funded by a tax on insurers. It was supposed to raise $20 billion in the first two years to fund the program as well as another $5 billion that would go into the general treasury. Because the revenue fell short, the Centers for Medicare and Medicaid Services opted to simply not deliver the $5 billion to the U.S. Department of Treasury that was promised, diverting it instead to payments for insurers.
Obamacare critics contend that move was illegal and is vulnerable to a legal challenge.
“The law, in the view of (Congressional Research Service) and other legal experts, is unambiguous and clear: The agency must remit the money to (the) Treasury (Department),” writes Doug Badger, a conservative policy analyst in The Hill.
His complaints echo comments made by Republicans who backed legislation, introduced in April, called the Taxpayers Before Insurers Act, that would redirect the money to the Treasury Department.
The U.S. Department of Health and Human Services "must stop cheating taxpayers,” Sen. Ben Sasse, R-Neb., said at the time. “The reinsurance program is a clear case of Washington’s cronyism: families are suffering Obamacare’s consequences but Washington bureaucrats are sending billions of dollars to well-connected insurance companies.”
Sasse and his allies will unlikely get the legislation approved, certainly not in the remaining few months of the Obama administration. Democrats are able to block legislation in the Senate, the president has veto power and, on top of all that, insurers are lobbying hard to keep the money flowing to their coffers. They paid the tax, after all, now the want the benefit.