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ICYMI: Rubio Calls For Repeal Of ObamaCare’s Risk Corridors
Rubio: “That isn’t fair that people and companies who can afford to hire lobbyists come up here and figure out a way to get the taxpayers to bail them out for a program that doesn’t work, was never going to work and is now worse than ever.”
U.S. Senator Marco Rubio
FOX News’ “On the Record with Greta Van Susteren”
February 5, 2014
Senator Marco Rubio: “A risk corridor is basically a program whereby insurers are told, ‘If you participate in this insurance marketplace and you miscalculate the amount of money that it’s going to cost to you insure these people, we will come in and make up for the difference.’ That’s a valid concept in a healthy insurance marketplace. The problem with ObamaCare is it is not a regular insurance marketplace. In fact, it’s not an insurance marketplace at all. It’s a high risk pool where these companies are now guaranteed to lose money because not enough young, healthy people are signing up. And the result is the taxpayers, the people watching this program, are going to see their tax dollars going to private insurance companies to bail them out for their losses.”
Greta Van Susteren: “All right. To put it another way, I always think of insurance companies like gambling. And it’s like an insurance company going to Vegas and they say that, ‘If you lose over $100, we will make the back end so you don’t have to pay more than the $100 lost.’ Is that sort of the idea of a risk corridor? It limits the amount of your loss?”
Rubio: “It is. But it limits the amount of your loss for companies that miscalculate. In a regular, normal, healthy insurance marketplace, most companies are not going to do that. You’re just going to have a handful of anomalies that in any given year had something happen and they lost a lot of money. And so this reinsures against that risk. The problem is that with ObamaCare it’s not just one or two companies, it’s going to be virtually every company in the exchanges losing money.”
Van Susteren: “I guess when you say the anomaly versus the non-anomaly that you’re making the comparison to Medicare Part D, which also has that risk pool. And which many Republicans supported because they thought that was a more predictable pool. Is that the difference? I mean, I know you differentiate between ObamaCare risk corridor and Medicare Part D.”
Rubio: “So Medicare Part D deals with a pool of enrollees that we understand very well. It’s seniors. It’s drug use, the prescription drug use. And we know what those patterns are and so companies could price it. With the ObamaCare exchanges, it’s broad, it’s open-ended and it’s very unpredictable. That’s why all these companies are being downgraded by Moody’s, because their initial filings early this year showed they expect to lose a lot of money because, as we predicted, young, healthy adults are not signing up in sufficient numbers for the exchanges.”
Van Susteren: “All right. So we wouldn’t even get into this risk corridor problem if ObamaCare met its numbers or predictions in terms of young, healthy people signing up to pay for the older, not so healthy people. Is that correct?”
Rubio: “That’s right. I mean, there might be a couple companies here or there that may have miscalculated, but you wouldn’t have this industry-wide problem that we’re now going to face. And the result is, in my opinion, there are going to be billions of dollars of taxpayer money needed over the next three years to bail out companies that miscalculated. And there’s going to be a lot of them.”
Van Susteren: “Alright, well it hasn’t happened yet. And I realize that your legislation is because you predict it is going to happen because of the preliminary numbers showing that young, healthy people are not signing up. But I’m curious, what do you want to do?”
Rubio: “Well, I think this should be repealed. This shouldn’t be in the law. We shouldn’t be having any sort of mechanism where companies that are guaranteed to fail are going to be bailed out through taxpayer dollars. And by the way, that was already going to happen at some level. It is now really going to happen because the President has lawlessly decided which parts of ObamaCare to implement and which parts not to implement. The result is even less young, healthy people are signing up for the program.”
Van Susteren: “Without taking a position on whether I’m for it or against it, I’m curious, if you were successful in repealing it — and I know it’s in the House and in the Senate, but it seems unlikely because it’s not going to go through the Senate — but even if you were able to repeal it, what happens then? Because these insurance companies have all made bad bets based on numbers and so they are going to have an enormous problem. They’ve got to get the cash some place, or frankly they’re going to have real money problems.”
Rubio: “Well that’s right. But again, many of these insurance companies were for ObamaCare when it first came out. They thought this was going to be a huge bonanza for them. So they got involved in pushing for the law, advocating for the law. Many of them were at the table when it was drawn up. But of course, they always counted on this money being there for them on the back end. That’s not right. That isn’t fair that people and companies who can afford to hire lobbyists come up here and figure out a way to get the taxpayers to bail them out for a program that doesn’t work, was never going to work and is now worse than ever.”
Van Susteren: “And of course, you can always tell with some of these things like the risk corridor, it isn’t written that if by some wild chance a lot of young, healthy people sign up, many more than anyone had expected, so they made a lot of extra money, the taxpayers wouldn’t be getting any of that extra money on the back end. Isn’t that true?”
Rubio: “Not only is that true, but a lot of this extra money that you are talking about is money that is government money, it’s taxpayer money anyway. Because don’t forget that these exchanges are partially funded, significantly funded, by money that’s coming through the subsidies that ObamaCare provides. So, in essence, it’s already taxpayer money that’s flowing into these companies and flowing into these plans.”
Van Susteren: “Let me say one thing though. This is a one-time deal, right? This is a sunset provision? This isn’t going to go on forever, this risk corridor?”
Rubio: “It’s for the first three years of the program. But again, TARP was a one-time deal and some of the other bailouts were a one-time deal. My bigger point is this: If ObamaCare is so flawed that needs to be bailed out with billions of dollars of taxpayer money, then it shouldn’t be done. The law shouldn’t exist. And this is one more example of why ObamaCare is bad for the country and bad for taxpayers.”