Government Illegally Diverts Billions to Obamacare Reinsurance Slush Fund
22nd February 2016
In a late Friday afternoon news dump before the President’s day holiday weekend, the Obama administration announced that it would pay out $7.7 billion to Obamacare insurers through the reinsurance program – including $1.7 billion in illegal payments. In all, the administration has unlawfully funneled $3.5 billion into this program.
For 2015 Obamacare reinsurance, the administration will pay out $6 billion raised from a fee on private health insurance and an additional $1.7 billion that under federal law belongs to the Treasury department. Indeed, the decision by the Obama administration directly violates section 1341 of Obamacare which explicitly states “money shall be deposited into the general fund of the Treasury of the United States and may not be used for the [reinsurance] program established under this section.”
The Obamacare reinsurance program was one of three programs (together with risk corridors and risk adjustment) created to hide the true costs of coverage on the exchange and prop up insurers by redistributing funds from different groups to Obamacare exchanges. In the case of reinsurance, this took the form of a $44 assessment on each individual with private health insurance.