Another delay for Obamcare? Where is the money coming from?

2013

Current reports on a possible deal for ending the budget/debt crisis say that the fee on health benefit plans to subsidize the risk for insurance companies in the health insurance exchanges may be delayed for a year.

Employers and unions may be happy about this, but insurance companies that set their 2014 premiums in the exchange plans assuming this stop loss coverage would help protect them from adverse selection maybe not so much given that according to the Department of HHS, “in 2014, it is anticipated that reinsurance payments will result in premium decreases in the individual market of between 10 and 15 percent relative to the expected cost of premiums without reinsurance.”

Not to worry though, insurers would still be able to claim reimbursements starting in 2014, with the reimbursements ending in 2016. The change would delay the collection of the tax for one year – until 2015 – but still collect the tax over a three-year period for a total of $25 billion. So, what is the point, the first year there is no money to pay the reinsurance, but health plans are still on the hook for the original $25 billion?

There is also the possibility that the 2.3% tax on medical device manufacturers will be delayed or eliminated, which if it happens would cause a multi- billion dollar gap in paying for Obamacare.

If you think Obamacare was too complex to work in the first place, just wait until Congress gets finished with a new round of tinkering that unravels any semblance of structure or integration of cost and funding.

What a sad state of affairs. Looks like the major insurers that decided not to participate in the marketplaces for 2014 were on to something more than they knew. Who will be next getting a pass on the Laws requirements … I vote for people over 30 being allowed to buy catastrophic insurance.

NOTE: You should read the comment on this post. Sadly, it is likely accurate.