By Francis Secada of Al Jazeera Dec 21, 2015
The passage of the Affordable Care Act (ACA), popularly known as “Obamacare,” in 2010 was so contentious that we continue to see the ripple effects. The Republican-controlled U.S. House of Representatives has voted to repeal the law more than four dozen times. The Senate, also controlled by the GOP, has passed its own version of repeal. Legal challenges have made their way to the Supreme Court on several occasions, leading to three decisions that have affirmed or augmented the law. One of these, in National Federation of Independent Business v. Sebelius, arguably caused the most harm by depriving low-income individuals of access to Medicaid and creating a coverage gap in some states, with people who don’t qualify for Medicaid but can’t afford private coverage.
But so far, no one has succeeded in destabilizing the implementation of the law quite like Sen. Marco Rubio of Florida, a leading contender for the Republican presidential nomination.
How did he do it? By slipping a provision into the Consolidated and Further Continuing Appropriations Act of 2015. Rubio added the provision, which limits the federal government’s ability to cover expense overages for insurance companies during the initial rollout of the ACA, into the appropriations bill in 2013. It was accepted into law in December 2014 and intended to fund the government through September 2015. Because it was snuck in, no one could really anticipate how destabilizing the law would be until the end of 2015, when insurers began reporting on projected and actual losses for the year. In effect, any insurer, whether privately owned or part of a cooperative, will receive significantly reduced federal assistance to cover expenses during the first few years of insuring new policyholders through state exchanges.
While this may not seem like a big deal, consider this scenario: Imagine you are a parent trying to encourage your children to be independent. You agree to help cover budget deficits for them during their first two years of independent living. They need to learn how to be responsible, but you know some mistakes will be made. You want to ensure a learning curve, but you also want to insulate them from catastrophic failure.
At the end of the year, when accounts are being finalized and balances are being determined, your boss cuts your salary. You are now limited in your capacity to help your children. Meanwhile, they have bought household items, such as furniture, kitchenware, cookware, toiletries and a bed. These are big purchases and are outside your children’s budgets, but they are necessary and will have many years of utility. Yet you can no longer cover their deficits as planned.
This is essentially what Rubio has done to the federal government’s capacity to cover insurers’ overages.