The following content is sponsored by American Resolve.
Health insurers have never had it so good. Their stocks are up more than 1,000 percent since Obamacare passed, and they now receive roughly a trillion dollars per year in federal subsidies.
With that much taxpayer money at stake, politics inevitably follows the cash—and lately, the industry has taken a hard-left turn.
In the last presidential campaign, insurers gave five times more to Kamala Harris than to Donald Trump. Blue Shield of California donated $500,000 and UnitedHealth donated $75,000 to Gov. Gavin Newsom’s ballot measure effort, Prop. 50, which could hand Democrats, and health insurers, as many as five additional seats in Congress. Newsom’s Prop. 50 won last week, increasing the chances of Democrats retaking the House and enacting their radical agenda, which includes impeaching President Donald Trump.
The strategy appears to be paying off. Democrats in Congress are repaying the favor by shutting down the government in order to keep $400 billion in Obamacare subsidies flowing from the American taxpayer to the insurance companies—and thus back to Democrats.
These are temporary COVID-era enhanced subsidies that the Democrats and their insurance company benefactors want to make permanent. Insurers have been surreptitiously enrolling people who aren’t even aware they have coverage and don’t use the policies, thus pouring more federal cash into insurance company coffers without requiring any outlays on the insurers’ part. This is a scam whose scale and duplicity is only achievable at the intersection of corporate cronyism and a bloated federal budget.
And the political patronage doesn’t stop there. Health insurers are already paying back the Democrats. This year, they’re hiking Obamacare premiums by 26 percent, even though overall U.S. health care costs are up only about 6 percent.
That’s a sharp contrast to last year, when insurers held premium hikes to just 4 percent as Joe Biden and Kamala Harris ran for re-election. Did insurance companies simply defer their losses into this year, or are they actively punishing Republicans who face mid-term elections next year? This ploy achieves both goals.
Furthermore, this health insurance company-led government shutdown has the effect of supporting Democrats’ other controversial shutdown goals, such as keeping nearly $200 billion in free health care benefits flowing to illegal immigrants.
Meanwhile, health insurers are not putting federal subsidies to use for the benefit of ratepayers and taxpayers. In fact, like with much of the federal budget, our money is going down the drain.
Federal auditors project that Medicare Advantage overbilling will exceed $1 trillion this decade. This year, the Trump Administration increased Medicare payments by $25 billion, of which UnitedHealthcare alone may receive about $7 billion.
Soon after, The Wall Street Journal reported that UnitedHealthcare, the biggest Obamacare insurer, paid $9 billion to AARP—essentially to stamp its name on the company’s Medicare plans. That comes as United faces a federal investigation into Medicare overbilling, a risk that could threaten its long-term solvency.
Imagine if that $9 billion had gone to patients instead. How any of this helps seniors is unclear.
If Republicans agree to extend the Obamacare subsidies, it should come with a condition: make insurers pay for the privilege. One option is to pass the bipartisan NO UPCODE Act, which would curb the industry’s Medicare Advantage overbilling. It would help put an end to the practice of using inaccurate or exaggerated diagnoses to inflate claims.
The Congressional Budget Office estimates the measure would save taxpayers $124 billion. Half could extend Obamacare subsidies for two years; the rest could reduce the deficit.
After raising premiums, cutting benefits, and facing federal investigations for overbilling Medicare, insurers need to rebuild public confidence, not test it.
Backing a government shutdown to get $400 billion is the wrong approach—and a sure way to invite political backlash.
