The red ink was inevitable. Now all of us will be forced to pay for it, whether we have an Obamacare plan or not. That new tax will be passed onto everyone in the form of higher premiums.
For months, there have been assertions that the mechanisms embedded in Obamacare, designed to offset losses that insurance companies will take this year on their exchange business, amount to a bailout of the insurance industry.
At the same time, it wasn’t clear where the money to pay for these “risk adjustments” would come from in the first place.
One scheme had the Obama Administration using money that it clawed away from profitable health plans to offset the losses incurred by the less fortunate insurers.
This, at least, was the way the so-called “risk corridors” were supposed to work, according to the original legislation. Problem is, it’s not clear that there will be enough health plans this year (or any at all) with excess profits that could be used to offset the losses incurred by insurers who were less fortunate.
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