Health Reform: President Obama used to say ObamaCare would bring insurance companies to heel. So why is he constantly trying to bail them out? The latest weird wrinkle came Friday, when administration officials practically begged insurers to sue the federal government for billions of dollars in taxpayer subsidies.
Despite repeated attempts by Democrats to portray private insurance companies as the bad guys, the industry gets billions in subsidy checks from taxpayers under ObamaCare. In its first three years, ObamaCare will have paid out roughly $88 billion in direct subsidies to insurers to lower the cost of coverage. This year alone, the industry will get $48 billion.
Roughly $11 billion of that money was paid in the form of "cost sharing" subsidies to reduce out-of-pocket costs for very low-income families, payments that U.S. District Judge Rosemary Collyer ruled were illegal, since Congress never appropriated any money for that particular subsidy.
The administration also diverted -- illegally by some accounts -- $3.5 billion to insurance companies that was supposed to be paid to the Treasury.  The money came out of a fee attached to every insurance policy sold.
And this is to say nothing of the $2.4 billion ObamaCare loaned out to create 23 nonprofit co-ops, money that taxpayers are unlikely to recover since all but six of these co-ops have already failed.
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None of it has been enough to make ObamaCare work.
Now, with premiums skyrocketing, insurance companies bailing and enrollment lagging, Obama is desperately looking for a way to bypass spending restrictions in the law to pump billions more in subsidy money into the industry.
That latest scheme came to light on Friday, when the Centers for Medicare and Medicaid Services, which runs ObamaCare, issued a memo regarding the "Risk Corridor" program.
This three-year program was supposed to help ease the industry into the new government-controlled ObamaCare world by literally spreading the wealth around. Companies that made "excess" profits pay into a fund, and that money is then given to companies with "excess" losses.
But the geniuses who designed the Risk Corridor didn't count on how badly ObamaCare would work in the real world. In 2014, winning companies paid in just $362 million to the Risk Corridor, while those with losses claimed $2.87 billion. Last year was even worse, and this year will likely be worse still. As a result, insurers will get a tiny fraction of the Risk Corridor payments they were promised.
The Friday memo shows that the administration has found a way to cover that gap.
How? By handing the money out in the form of legal settlements to insurers that sue the government for the Risk Corridor money they say they're due.
As the Friday memo states, "We know that a number of issuers have sued in federal court to obtain the Risk Corridor amounts that have not been paid to date." The memo goes on to say that the Department of Justice will "vigorously" defend against such claims, but then adds that -- wink, wink -- "we are open to discussing resolution of those claims."
In other words, sue us, we'll settle out of court, you'll get your subsidy checks, and taxpayers will pick up the tab.
This madness must stop.
Even if insurers were to get their hands on these one-time bailout payments, it won't make a difference to the success of ObamaCare. Its flaws are fundamental, and will only be fixed by scrapping the law entirely and replacing it with proven free-market reforms.
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