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Krauthammer: Stop the bailout

  • (LISA BENSON / Washington Post Writers Group)

First order of business for the returning Congress: The No Bailout for Insurance Companies Act of 2014.

Make it one line long: “Sections 1341 and 1342 of the Affordable Care Act are hereby repealed.”

End of bill. End of bailout. End of story.

Why do we need it? On Dec. 18, the chairman of the Council of Economic Advisers was asked what was the administration's Plan B if, because of adverse selection (enrolling too few young and healthies), the insurance companies face financial difficulty.

Jason Furman wouldn't bite. “There's a Plan A,” he replied. Enroll the young.

But of course there's a Plan B. It's a government bailout.

Administration officials can't say it for political reasons. And they don't have to say it because it's already in the Affordable Care Act, buried deep.

First, Section 1341, the “reinsurance” fund collected from insurers and self-insuring employers at a nifty $63 a head. (Who do you think the cost is passed on to?) This yields about $20 billion over three years to cover losses.

Then there is Section 1342, the “risk corridor” provision that mandates a major taxpayer payout covering up to 80 percent of insurance-company losses.

Never heard of these? That's the beauty of passing a bill of such monstrous length. You can insert a chicken soup recipe and no one will notice.

Nancy Pelosi was right: We'd have to pass the damn thing to know what's in it. Well, now we have, and now we know.

The whole scheme was risky enough to begin with — getting enough enrollees and making sure 40 percent are young and healthy. Obamacare is already far behind its own enrollment estimates. But things have gotten worse. The administration has been changing the rules repeatedly — with every scrimmage-line audible raising costs and diminishing revenue.

First, it postponed the employer mandate. Then, it exempted from the individual mandate people whose policies were canceled (by Obamacare). And for those who did join the exchanges, Health and Human Services Secretary Kathleen Sebelius is “strongly encouraging” insurers to — during the “transition” — cover doctors and drugs not included in their clients' plans.

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