One of the centerpiece programs of the Barack Obama presidency, the Affordable Care Act (ACA), or “Obamacare,” could be on life-support and in need of a bail-out, according to healthcare experts.
With open enrollment for Obamacare beginning on Tuesday, insurance carriers warn that nearly 1.5 million Americans could lose their health insurance in the coming months. As more insurers abandon the program, the White House signals it wants to put roughly $175 billion into Obamacare to save it.
“One way is to say ‘Let’s just throw more money at this stuff,” says Ed Haislmaier, a health policy researcher. “Money we haven’t got, by the way.”
Obamacare was supposed to be budget neutral, meaning insurers making healthy profits in the Affordable Care Act’s first years would shift that windfall to insurers losing money. Two years ago, more insurers lost money and received only a portion of what was needed to cover losses, creating what experts say is a nearly $3 billion shortfall.
Obamacare was also supposed to collect money from insurers and directly pay the Treasury Department. But because of massive shortfalls in dozens of states, the ACA paid the insurers first, bypassing Treasury altogether and potentially leaving taxpayers on the hook for $5-billion dollars.
“Politicians caused this thing to happen the way it has happened,” said Ed Kafes, a Health Insurance Expert. “And they’re going to have to fix it.”
On Capitol Hill, the House Speaker says congress can fix it. Not by bailouts, but by expanding health savings accounts and allowing Americans without employer insurance to get tax credits to purchase it.
“We can have a system where people with pre-existing conditions---people who get sick---- can get affordable care,” said House Speaker Paul Ryan. “We can do all of these things without having a government take-over like we have right now.”
One expert questioned bailing out a program where premiums (on average) are increasing by 25%.
“So it doesn’t get better,” says Haislmaier. “It’s a question of what can be salvaged and how you can limit the damage that’s going to be the lasting effect.”