Roll Tide

One might be forgiven for thinking health insurers are cracking under the strain of Obamacare’s broken insurance exchanges. But don’t be fooled: it is the 10 million Obamacare enrollees who are in trouble, not the insurers.

To be sure, new nonprofit cooperative insurers, set up with special subsidies to compete in the exchanges, have had a terrible run. They deliberately underpriced their premiums to gain market share, expecting the federal government to bail out their losses. Once the Republicans took over the House of Representatives, then the Senate, this became unlikely. As a result, the administration announced in November that 12 of 23 nonprofit cooperative insurers were shutting down.

However, these nonprofit cooperative insurers, which did not exist before Obamacare, are not important overall. That is why UnitedHealth Group’s November 19 announcement that it is losing $500 million on the Obamacare exchanges and might withdraw from Obamacare in 2017 is a big deal. Just a few weeks earlier, UnitedHealth Group had announced it would expand into 11 new states’ Obamacare markets.

The insurer is also dialing back advertising and brokers’ commissions for 2016, even though it is too late to withdraw from the market literally. (We are in the middle of Obamacare’s third open season.) However, it is the threat of absolute withdrawal in 2017 that has shocked many. By 2017, the fourth year of Obamacare, the market is supposed to have shaken out. Both insurers and Obamacare’s political sponsors understood that insurers would not know how expensive claims would be from those who signed up during the first three years. That is why insurers were given temporary taxpayer subsidies, called reinsurance and risk corridors, for 2014 through 2016. Reinsurance is a direct handout of $25 billion from taxpayers to insurers. Risk corridors were more complicated and supposed to be budget-neutral. Insurers that made more money than expected would pay money to those that lost more money than expected.

 

When it became clear that the losers far outnumbered the winners, the administration tried to raid the kitty to make risk-corridor payments from the general fund. By this time a new Congress (in which the majority opposed Obamacare) actually read the bill that its predecessor had passed in 2010 and pointed out that the administration could not pay out that money. As a result, Obamacare insurers will only receive $362 million of $2.9 billion of risk-corridor payments requested.

However, even if Congress did cave in and pay the risk corridors in full, payments would finish in 2016. That is what makes UnitedHealth Group’s announcement about dropping out in 2017 so important: it is effectively an admission that three years are not enough to learn how to manage risks in Obamacare’s exchanges. Indeed, it suggests that risks are unmanageable, that the vicious circle of increasing premiums’ driving healthy subscribers away and leaving only sick ones on the books cannot be stopped under Obamacare.

The exchanges have fewer victims than initially expected. The economy has been strong enough that employer-based coverage has stood up to Obamacare. As a result, only 10 million people are caught in them, instead of the 21 million forecast when the law was passed. However, this is a mixed blessing. These 10 million are a politically weak constituency of working-class and lower middle-class citizens in middle age — the people whose needs politicians always talk about but seldom address because they are not politically active.

The only group politically powerful enough to renegotiate the exchanges are the insurers, and they show no more creativity than to lobby for their subsidies to be restored, which this Congress has promised not to do. On the other hand, simply quitting the exchanges is not very painful for large health insurers. UnitedHealth Group’s stock took a small hit when it admitted its struggles, but Obamacare exchanges are a tiny share of its business. As more insurers make the same decision to quit, 10 million Obamacare subscribers will be left high and dry in short order. (DC)

Political Cartoons by Michael Ramirez
Political Cartoons by Bob Gorrell
Political Cartoons by Jerry Holbert
Political Cartoons by Bob Gorrell

Obama’s Tough Choices…seriously?…

President Obama’s 2012 budget will be roughly $3,800,000 million ($3.8 trillion).

The anticipated 2012 budget deficit will be $1,500,000 million ($1.5 trillion). (for the Third Year in a Row!!) This means we are borrowing that amount from our children to fund all of the Democrats’ Utopian spending programs.

Finally, the president has proposed “tough budget cuts” that total $775 million.

No, that’s not a joke. Unfortunately.

Let’s illustrate the magnitude of Obama’s cuts.

CAN YOU SEE IT?? if you can, you have super vision!

Obama’s cuts aren’t even visible in this chart. Let’s zoom in.

Blowing it up about ten times allows us to see a tiny little sliver: those are the cuts.

See it now, that little tiny sliver? Still need Superman’s vision to see it?
Blowing the chart up a further ten times still barely exposes Obama’s proposed cuts.

…Lew said that the Valentine’s Day budget will proposed cutting in half community service block grants to grassroots groups in poor communities… He said “this cut is not easy for” Obama.

Not easy.

Our country’s going bankrupt and he can’t find anything to cut.

These Democrats are so far off the reservation that there’s really no hope left for them as a political party. This degree of dishonesty and wanton fiscal destruction must be rewarded with political obliteration.

And just to add Insult to Injury

The Left’s favorite garbage-in garbage-out justifiers for ObamaCare, The Congressional Budget Office (CBO) testified to this , this week:

Testifying today before the House Budget Committee, Congressional Budget Office (CBO) Director Doug Elmendorf confirmed that Obamacare is expected to reduce the number of jobs in the labor market by an estimated 800,000. Here are excerpts from the exchange:

Chairman [Paul] Ryan: “[I]t’s been argued…that the new health care law will create jobs and increase labor force participation. But if I recall from your analysis, it was quite the opposite. Is that not the case?”

Director [Douglas] Elmendorf : “Yes.”…

[…]

Rep. [John] Campbell: Thank you, Mr. Chairman, we’ll — and Dr. Elmendorf — and we’ll continue this conversation right now. First on health care, before I get to — before I get to broader issues, you just mentioned that you believe — or that in your estimate, that the health care law would reduce the labor used in the economy by about 1/2 of 1 percent, given that, I believe you say, there’s 160 million full-time people working in ’20-’21.  That means that, in your estimation, the health care law would reduce employment by 800,000 in ’20-’21. Is that correct?

Director Elmendorf: Yes. The way I would put it is that we do estimate, as you said, that…employment will be about 160 million by the end of the decade.  Half a percent of that is 800,000.

So anyone for Knives and bear skins? That’s all we’ll have if these idiots continue.

Economics 101:

http://www.youtube.com/watch?v=g8k1LeSwtCw&feature=player_embedded

Liberals must be defeated. Period. We can’t afford their idiocy anymore.

And anyone who mentions “tough choices” by the Democrats or the President feel free to laugh openly in their face!

Political Cartoons by Chuck Asay

Political Cartoons by Ken Catalino

Political Cartoons by Chuck Asay