Surprise: WH Weighs New Scheme to Raid Obscure Fund, Jam Through Illegal Obamacare Bailouts

Posted: Sep 30, 2016 1:25 PM

Step one -- The nonpartisan Government Accountability Office (GAO) concurs with the nonpartisan Congressional Research Service (CRS) in finding that the Obama administration violated the law by illegally redirecting Obamacare-related funds to insurance companies. Taking taxpayer dollars specifically earmarked by lawmakers for specific purposes and applying them to a politically-motivated bailout does not fall under the executive branch's discretionary purview, GAO concludes. Chris Jacobs offers additional context:

As I have previously explained at NRO, the reinsurance funds collected from employers had two – distinct purposes: first, to repay Treasury for the $5 billion cost of a separate program in place from 2010 through 2013; and, second to subsidize insurers selling Obamacare plans to high-cost patients during the law’s first three years. When collections from employers turned out to be less than expected, HHS prioritized the second objective to the exclusion of the first – an action that, according to the GAO, violates the plain text of the statute. As the opinion noted, “the fact that HHS’s collections ultimately fell short of the projected amounts does not alter the meaning of the statute.” The memo continued that, because agencies must “‘effectuate the statutory scheme as much as possible’ . . . HHS continues to have an obligation to carry out the statutory scheme using a method reflective of the specified amounts even though actual collections were lower than projected.” As a result, the GAO concluded that the Department has no authority to divert to insurers approximately $3 billion in reinsurance contributions that should be allocated to the Treasury.

Step two -- Republicans, who have done excellent work blocking various taxpayer-funded bailouts of health insurance companies taking on water under the failing law, and who challenged HHS's shady shell game, applaud the decision (via Bloomberg and Politico):

The letter was cheered by Republicans in Congress who said that it provided evidence that the programs were being used by the Obama administration to bail out insurers. “GAO's new legal opinion is simple: the law is the law and HHS broke it,” Sen. Ben Sasse (R-Neb.) said in a press release. “Washington has been running a textbook, crony scheme: cutting checks to big insurance companies that can afford lobbyists instead of giving taxpayers the $5 billion they're owed. Congress must put taxpayers ahead of insurance companies,” he added. In press releases from both Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Committee, and Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, the lawmakers who requested the legal opinion from the GAO said the letter confirmed that the HHS had violated the law in its management of the program. “This is about fairness and respect for the rule of law clearly anchored in the Constitution,” they said in a joint statement.

Step three -- The Obama White House explores tapping into other federal funds to execute the bailouts anyway, deliberately defying the clear will of Congress in a desperate, dubious effort to shovel tax dollars into major insurers' coffers.  They're trying to fix the pounding political headache they've created for themselves, as Obamacare-participating insurers post huge losses and exit marketplaces left and right.  The hope is to stem the tide of this collapse with big bailout payments, using taxpayer dollars (that were never intended for this purpose) to paper over the law's fatal flaws while Obama remains in office:

The Obama administration is maneuvering to pay health insurers billions of dollars the government owes under the Affordable Care Act, through a move that could circumvent Congress and help shore up the president’s signature legislative achievement before he leaves office. Justice Department officials have privately told several health plans suing over the unpaid money that they are eager to negotiate a broad settlement, which could end up offering payments to about 175 health plans selling coverage on ACA marketplaces, according to insurance executives and lawyers familiar with the talks. The payments most likely would draw from an obscure Treasury Department fund intended to cover federal legal claims, the executives and lawyers said. This approach would get around a recent congressional ban on the use of Health and Human Services money to pay the insurers. The start of negotiations came amid an exodus of health plans from the insurance exchanges that are at the heart of the law...GOP lawmakers are already beginning to cry foul. “It’s an end run on the clear .?.?. intent of Congress,” said Rep. H. Morgan Griffith (Va.). The money in question involves one of three strategies to help coax insurers into the marketplaces by promising to cushion them from unexpectedly high expenses for their new customers.

Click through for more details about this cynical scheme, the audacity of which is breathtaking. The Obama administration wants to raid an entirely separate federal fund in order to funnel billions of tax dollars as an effective bribe to temporarily slow the implosion of an unsustainable, failing law that most Americans opposed from the moment it was proposed and debated -- and continue to oppose today, years later, as critics' predictions have been vindicated by reality.  The law is actively harming more Americans than it's helping, yet Obama is intent on ignoring Congress and fleecing taxpayers in a frantic effort to apply lipstick to this fetid, sweating pig of a disastrous partisan experiment.  Every Democrat running for office this year should be asked on the record whether they support this bailout.