1/23/14, "Moody's: Uncertain healthcare landscape leads to negative outlook for US health insurers," moodys.com
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1/31/14, "A Few More Reasons To Repeal ObamaCare," Betsy McCaughey, IBD
"Moody's rating agency has lowered the outlook for health insurers from stable to negative, blaming ObamaCare.
Few Americans will shed tears for insurance companies. But the Moody's announcement is a warning sign to taxpayers. They'll be getting clobbered.
Section 1342 of the Affordable Care Act forces taxpayers to make insurers whole for most of the losses incurred selling ObamaCare exchange plans through 2016. The bailout is designed to conceal the failure of the president's signature health law until he is out of office.
No one in the Obama administration talked up the advantages of bailing out insurers. It was kept under wraps until the fall of 2013.
That's when 5 million to 6 million health plans were canceled because they didn't comply with ObamaCare's one-size-fits-all coverage requirements effective Jan. 1.
Insurers developed new plans, as the health law required, set premiums (generally higher) and sent out notices canceling the old plans.
That caused public outrage. Trying to quell it, the president ignored his own law and told insurance companies on Nov. 14 they could keep selling the old plans. Insurers were caught off guard. They predicted there would be less demand for their new plans and that they'd lose money.
Here's where the plot thickens. On the same day, an Obama administration health official, Gary Cohen, announced that the federal government (taxpayers) will offset most losses, citing Section 1342.
Sweetening what the law already guarantees, he pledged to "modify" the bailout's "final rules to provide additional assistance." That's when Congress finally did its job and read Section 1342.
Sen. Marco Rubio, R-Fla., called it a "dirty little secret" and offered legislation to repeal it. House Republicans held a hearing at which Secretary of Health and Human Services Kathleen Sebelius confessed that the administration had never tried to estimate what the guarantee could cost taxpayers.
Ah, how freely government bureaucrats spend other people's money.
The 'Death Spiral'
Last week's announcement by Moody's underscores the likelihood that taxpayers will be socked with bailout costs of unknown proportions unless Section 1342 is repealed.
That's just one reason for repeal. Another is that 1342's purpose is to bamboozle the public and hide ObamaCare's inevitable failure until health "reform" is entrenched beyond turning back.
Inevitable, because anyone with knowledge of health insurance knew from the start that ObamaCare's exchanges could not offer affordable insurance. The premiums have to cover a long list of mandatory benefits, as well as $100 billion in taxes that the law imposes on insurers over the decade.
Most significantly, the premiums have to cover the cost of caring for seriously ill people at the same price as the healthy pay. Every state that tried this community rating scheme (including New York) has seen premiums soar, and healthy people stop buying insurance.
It's called the "death spiral." All these factors make "affordable" an impossible goal under ObamaCare's rules. That's what the bailout provision is designed to conceal through 2016.
As the Society of Actuaries explains, the bailout was designed to incentivize insurers to set premiums too low. It's guaranteed to make ObamaCare look affordable. That's beneficial for politicians tied to ObamaCare and helpful to insurers who want market share.
Of course, since insurers choosing not to participate in the exchanges can't get bailouts and don't get subsidies for their customers, you won't have the option of buying from them for long.
Think about it. If the federal government gave out subsidies to buy only Ford cars and told Ford Motor Co. not to worry about pricing the car, because taxpayers will make up Ford's losses, how long do you think Chrysler and Toyota could compete?
Moody's also cautioned that its downgrade was due largely to the "ongoing unstable and evolving environment" as the Obama administration repeatedly revises the Affordable Care Act, decreeing "new regulations and announcements that impose operational changes well after product and pricing decisions were finalized."
As any business owner will tell you, a temporary bailout is no substitute for the rule of law. The bailout keeps ObamaCare on life support, at taxpayers' expense, while the free market expires and the rule of law disappears. That is the real state of the union." via Lucianne
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1/23/14, "Moody's: Uncertain healthcare landscape leads to negative outlook for US health insurers," moodys.com
"Uncertainty over the demographics of those enrolling in individual products through the exchanges is a key factor in Moody's outlook change, says the rating agency. Enrollment statistics show that only 24% of enrollees so far are aged 18-34, a critical group in ensuring that lower claim costs subsidize the higher claim costs of less healthy, older individuals. This is well short of the original 40% target based on the proportion of eligible people in this cohort, says Moody's.
In addition, the impact of the industry assessment tax that begins in 2014 is unclear, says Moody's. The rating agency notes that while some insurers built this tax into their premium calculations, the amounts received may still be insufficient to cover their share of the assessment.
Medicaid business is particularly vulnerable to this disconnect, as insurers cannot pass on additional costs to consumers, and it remains to be seen whether states will permit insurers to factor in the assessment cost in determining Medicaid reimbursement rates.
Looking forward, Moody's expects reduced net earnings margins of approximately 2% in 2014, compared to an average of 3% the previous year and smaller overall membership growth of approximately 1%, down from 3% in 2013, with company strategies continuing to focus on revenue and income diversification."...
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Comment: John Boehner could've stopped this from happening anytime after Jan. 2011 but refused to do so. He has never allowed a standalone up or down vote to defund (as opposed to repeal) ObamaCare. The House has 100% power in financial matters, can't be vetoed by Senate or Pres. It's completely false to say the GOP has no responsibility for ObamaCare. Nor has Boehner ever allowed a vote to approve O'Care as a tax. The House must approve all taxes. Then they stuck us with a bailout of the insurance industry under section 1342. The whole reason we gave the GOP House all those extra people in Nov. 2010 was so they could easily defund O'Care. The country was very much in favor of it. Instead the GOP completely ignored us, wouldn't even mention ObamaCare, watched billions of our tax dollars continue to fly out the door to states and cronies to set up the bureaucracy. The US no longer has a two party system. It has a single party and the Mafia wishes they thought up something this good.
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