Obamacare

Yet Another Underfunded Bridge Program Brought To You By ObamaCare

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A bridge too far?

Earlier this summer, 18 states declined to participate in the PPACA's new network of high risk pools, which the Obama administration had hoped would be a bridge from now until the insurance exchanges are set up in 2014. The states' biggest gripe? Funding—too little of it. States like Virginia and Georgia didn't want to get involved with a program that might leave their residents with an unfunded liability. Just about every estimate, including the CBO and Medicare's chief actuary, estimated that the $5 billion set aside for the program would run out in early—possibly as soon as 2011.

But it looks like the high-risk pools weren't the law's only underfunded bridge. The Early Retiree Reinsurance Program, which is intended to encourage employers to continue to provide health coverage to retirees through a federally funded reinsurance program. As Health and Human Services Secretary Kathleen Sebelius explained it:

"The Affordable Care Act's Early Retiree Reinsurance Program will make it a little easier for employers to provide high-quality health benefits to their retirees as we work to put in place market reforms to lower costs for all," Sebelius said in a statement.

Or will it? As with the high-risk pools, there's a big problem: The program, which is supposed to bridge the gap between now and 2014, doesn't have enough money to actually last until 2014.

But U.S. Rep. Bill Posey said the program looks more like a shell game, and it could come up short financially. "The timing of this announcement by the administration is interesting because earlier this month Medicare trustees issued a report noting on page 183 that the new health-care law will result in nearly 6 million retirees losing their prescription drug coverage from their former employers—a fact that went largely unreported," said Posey, R-Cocoa.

Posey added, "Nowhere in today's HHS release is there a reference to HHS' own warning to retirees that this program is largely unfunded—by perhaps tens of billions of dollars.

A separate report from The Employee Benefit Research Institute estimates that the program's funds will dry up in the next two years. The problem here is not that these programs should've been given more money. It's that, like so much of what's in the PPACA, they were poorly conceived, designed to be passed quickly but meant to be fixed down the road when they eventually broke down. And most likely that will mean throwing extra money at whatever problems inevitably arise, despite the fact that the funding issues on both programs were foreseeable. Conveniently for advocates, that plan makes the programs look cheaper up front that they actually are. Ultimately, though, it's just a way of hiding their true costs.

(Thanks to Bob Vineyard for the links.)

NEXT: The President's Contradiction Soup

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  1. like so much of what’s in the PPACA, they were poorly conceived, designed to be passed quickly but meant to be fixed down the road when they eventually broke down.

    How much longer will they even *pretend* they are passing anything but title pages?

    1. But it’s getting more and more popular with every passing day. That goof Gibbs and the sheepfucker Reid said so.

  2. P Brooks has it exactly right. Our legislators are no longer legislating in even the broadest sense, but simply voting on vague language that states amorphous goals, all the while empowering the named executive agency to actually write the rules in the form of regulations.

    1. Which, of course, is an unconstitutional delegation of power to the Executive Branch. Not that the increasingly balless Court will do anything about it.

  3. “The timing of this announcement by the administration is interesting because earlier this month Medicare trustees issued a report noting on page 183 that the new health-care law will result in nearly 6 million retirees losing their prescription drug coverage from their former employers?a fact that went largely unreported,” said Posey, R-Cocoa.

    R-Cocoa? I thought that was Count Fudgula’s district.

    1. Well, there was that unfortunate business with a page…

    2. That was Count Chocula. Florida’s too socially conservative to vote for a count Fudgula…

  4. Whaaat? The democrats were not serious about how they were going to fund socialized medicine? I thought the adults were now in charge. Lol!

    1. Fund? Comrade, socialized medicine is free! And super-high quality! Why would it needed to be funded?

  5. Just another bridge to nowhere.

  6. You almost get the impression that Congress assumes they’ll simply confiscate whatever resources they need, whenever they need it. Why bother planning?

  7. You have to be making a mistake. How can this stuff be unaffordable? The name of the bill has “Affordable” right in the name! It has to be affordable the bill says so.

  8. Nancy said we needed to pass this to find out what’s in it. And now that we passed it and found out what’s in it, it looks like a big bowl of crap soup. This leads me to believe Nancy didn’t know what was in it either.

    The fact that Sebelius would say that the plan “will make it a little easier for employers to provide high-quality health benefits to their retirees as we work to put in place market reforms to lower costs for all” clearly shows how little the folks in charge understand the market itself.

    The market wasn’t the problem. The government getting in the way of the market was the problem, and now they are going to make the initial problem exponentially worse and more expensive.

    The list of reasons the Democrats are going to get trounced in November is growing by the day.

  9. For years doctor you said I couldnt aford you, but I can afford you now cause Obama says so. Gimme! gimme1 gimme! gimme!

    Thelulz

  10. Florida’s too socially conservative to vote for a count Fudgula…

    Racist hicks.

    1. Hey now!

  11. Step 1: Crowd out the private insurance market by undercutting their prices and heavily regulating their practices.
    Step 2: Replace private insurance with a patchwork of government programs that are all underfunded.
    Step 3: ?
    Step 4: Perfect free health care for everyone!

  12. “The Early Retiree Reinsurance Program, which is intended to encourage employers to continue to provide health coverage to retirees through a federally funded reinsurance program.”

    Seems like part of this sentence is missing.

    1. Perhaps:

      The Early Retiree Reinsurance Program (ERRP), which is intended to encourage employers to continue to provide health coverage to retirees through a federally funded reinsurance program.

  13. The ERRP program, in the typically inept understanding of the writers of the reform bills, was a comical effort to bribe employers into extending coverage to early retirees that would take pressure off the new “public” programs (Medicaid extension, exchange vouchers, etc.) from one of the highest utilizing segments of the uninsured population – those between 55 and 65 who are no longer eligible for employer benefits. This was a failed effort because the existing cost for the number of early retirees already covered by employer plans dwarfs the potential relief offered by the ERRP. The funding provided, and the relatively minimal conditions to qualify, make the entire program a simple lottery for such existing employer plans. Those who got in their requests and qualification credentials early enough got into the prize drawing. Those funds will vaporize in a short amount of time, and without replenishment, things will simply go back to the way they were. I wonder if it might be worth investigating the “winners” of this lottery to see how many of them turn out to be administration favorites, actually – how much oversight is there to the selection process when more takers than funds are available, really?

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