Obama Administration Promises to Shift Money Around to Make Obamacare’s Health Insurer Bailouts Work, If Need Be

Obamacare’s defenders have responded to charges
that the law creates a system of bailouts for health insurers by
arguing that the bailouts may not actually be bailouts. After all,
the law’s risk corridors create a system of symmetrical payments in
which insurers that spend somewhat more than expected on health
claims get paid by the administration, but those spending somewhat
less than expected must pay in. In theory, it all balances out,
with some insurers paying in and others getting paid. And it’s even
possible that, overall, insurers will pay in more than they are
paid.

Possible, yes, but far from certain. What happens if most or all
of the insurers participating in Obamacare’s exchanges end up with
higher than expected claims, and the administration owes them
all? 

Well, in that case they’ll find the money to pay. Somehow. As
Philip Klein reports in
The Washington Examiner: 

Bowing to an aggressive lobbying effort by insurers,
the Obama administration announced Friday it would use
“other sources of funding,” if needed, to finance a bailout for
insurance companies if the industry racks up excessive losses
through President Obama’s health care law.

The news, buried in a 435-page regulatory
filing by the Centers for Medicare and Medicaid
Services, undermines prior assurances by the administration that
the program would be budget-neutral.

There’s a bit of a catch, which is that the regulation says it
will use those other funding sources “subject to the availability
of appropriations. And
according to a recent Congressional Research Service memo, the
law doesn’t actually appropriate any funds for the risk corridors
program. And it’s a pretty safe bet that Republicans in Congress
aren’t going to appropriate funds any time soon (not that the
administration has felt particularly constrained by the finer
details of the law in the past). This could get
complicated.