One of the reasons that insurers aren’t too worried about the low signup rate for Obamacare is that it’s early days. They figure things will work out eventually, and in the meantime they’re protected from serious losses during the first three years by a provision of the bill called “risk corridors.” The details aren’t too important here. In a nutshell, if it turns out that an insurer has seriously miscalculated the cost of its coverage on the exchanges—perhaps because too few people have signed up—the federal government will reimburse them for part of their losses.
This is all very wonky stuff designed to smooth the transition to Obamacare. You’re only reading about it now because a little while back some bright spark decided that if you called this an “Obamacare bailout” it might turn into a big campaign issue. Maybe Republicans could even get it repealed, which in turn would make life so hard for insurers that they’d drop out of Obamacare entirely! Bwa-ha-ha!
But their plan isn’t going anywhere, and Dave Weigel thinks it’s partly because conservatives have acted too much like a stock villain from a James Bond movie:
I mention Bond villainy for a reason. What’s the mistake that Goldfinger and Blofeld and 006 et al constantly make? They explain the plot while there’s still time for 007 to stop it. Conservative groups from FreedomWorks to Heritage Action have rallied behind Rubio’s bill and a companion House bill, and obviously the hope is that a “no bailout” bill would gather momentum in the Senate and make life difficult for red state Democrats. But Congress just passed an omnibus funding bill that takes care of things for the rest of the year. A good chance to pressure the Senate on Obamacare — slotting the “no bailout” language in the House bill — has been lost. Even a scheme backed by Krauthammer, Ponnuru, and Cannon, all well-respected on the right, failed to gain traction in a Congress that’s been chastened by the shutdown, and is more fearful of causing a crisis to gut Obamacare.
Neither Democrats nor the insurance industry were ever going to be fooled by any of this, but by making it clear that the real goal of repealing risk corridors is to cripple Obamacare completely, proponents lost even the slim chance they had to get a hearing from the press and from independents. They might take another crack at making this a big issue when the debt ceiling comes up, but it probably won’t get them anywhere. Their tea party allies will be thrilled, but everyone else will see it as yet another in a long, tired string of contrived outrages designed to kill Obamacare. Time to move on, folks.