Obamacare Losses So Bad There's No Money To Bail Out The Insurers

But Obama wants to do it anyway, and where do you suppose he wants to get the money? You can have one guess.

by Herman Cain: A few days ago, we talked about the continued disaster that is ObamaCare. But I thought it would be worth taking a close look at one specific aspect of this disaster, because if President Obama gets his way, it will cost you. Dearly.

You might remember that, back in the days when the Obama Administration was trying to ram ObamaCare through Congress, health insurers were strangely on board supporting the bill. Why would they do that?

Well, they would do it because – when you dug down deep into the bill – you saw that ObamaCare built in certain guarantees that seemed to offer big rewards and little risks for insurers. One, of course, was the individual mandate. What could be better than a law that requires everyone to become your customers?

But what if the new business wasn’t profitable? Losing money simply would not do. So ObamaCare also built in what become known as the “risk corridor,” which provided that if any insurer’s losses exceeded a certain amount, there would be a pool of money collected from other insurers’ profits to reimburse them for their losses.

Seems like a pretty good deal, right? People have to sign up with you, and if you lose money, you get bailed out. No wonder they all got on board.

But they should have known that when politicians try to mess around with markets, things never go the way the politicians say they will.

First of all, all those new customers? As the insurers have discovered to their horror, far too many are sicker than the norm, which means the insurers are having to lay out far more money in care costs than they’re collecting in new premiums. So no, while the individual mandate is bringing them new customers, the new business is not profitable for them.

Then there’s the matter of the risk corridor. Remember the original idea? If anyone loses money, a pool from the profits of the other insurers can be tapped to cover the losses. But what do you do if just about everyone is losing money? What do you do if the losses are so steep and the profits are so scarce that there’s not enough money in the pool to cover the losses?

That’s exactly where we stand right now. And I bet you can figure out what Obama wants to do. Yep, he wants Congress to allocate taxpayer money to bail out the insurers.

This is where Congress should say not just no, but hell no. ObamaCare is costing the taxpayers way too much already in the form of premium subsidies. If we’re going to subsidize the policyholders and subsidize the insurers, why do we have a private insurance market at all? Of course, that’s the same question many Democrats would ask, and their answer would be that we shouldn’t. Just let the federal government take over the whole thing.

No way. The insurers and the Democrats created this mess, and they can deal with the consequences. And if Republicans are going to lift so much as a finger to help them, the price should be clear and non-negotiable: The complete repeal of ObamaCare.

Of course, you know Obama will never agree to that, and neither will Hillary. That being the case, I’d say the action step now belongs to the voters, wouldn’t you?
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Herman Cain is a conservative radio host of CainTV, a 2012 GOP presidential primary candidate with over 40 years of experience in the private sector as an analyst for Coca-Cola, an executive at Pillsbury, a regional Vice President for Burger King, and CEO of Godfather's Pizza. Cain served as Chairman of the Federal Reserve Bank of Kansas City and a supervisory mathematician for the Dept. of the Navy.

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