John Kasich’s Obamacare Plan Is A Giant Bailout For A Junk Law

Christopher Jacobs:

On Thursday morning, governors John Kasich (R-OH) and John Hickenlooper (D-CO) released a plan to “stabilize” Obamacare insurance markets. Here’s what you need to know about the details of the proposal.

John Kasich Doesn’t Want to Repeal Obamacare

It’s worth repeating that, as recently as three years ago, Kasich said the followingregarding the health care law: “From Day One, and up until today and into tomorrow, I do not support Obamacare. I never have, and I believe it should be repealed.”

Oh, how times have changed. The governors’ plan would not only not repeal Obamacare, it would further entrench the law, by giving tens of billions, and more likely hundreds of billions, of new taxpayer funds to wealthy insurance companies.

Governors Want Trump to Violate the Constitution

The plan calls on the Trump administration to “commit to making cost-sharing reduction payments.” But as this space has previously described, the United States has an interesting document—you may have heard of it—called the Constitution. That Constitution places the “power of the purse” with Congress, not the executive.

If Congress does appropriate funds—for cost-sharing reductions or anything else—the executive cannot refuse to spend that money, per a prior Supreme Court ruling. But if Congress does not appropriate funds, the executive cannot spend money. To do otherwise would violate a criminal statute.

Asking the Trump administration to violate the Constitution may seem like a natural request to someone like Kasich, a big-government liberal who ran into legal trouble for expanding his state’s Medicaid program unilaterally. But our nation is a government of laws, not men, which makes obeying the law an obligation of all citizens, let alone the chief executive.

A Selective History on Reinsurance

The blueprint cites Republicans’ proposed “stability funds” during the “repeal-and-replace” debate to suggest a “temporary” stability fund providing corporate welfare to insurers—demonstrating the lack of wisdom of the original congressional proposal. In addition to this “temporary” stability fund, the governors’ plan also claims that “the federal government has gone back on its commitment to these programs, in some cases refusing to fully fund [sic] risk sharing programs.” It goes on to propose that “Congress should modify and strengthen federal risk sharing mechanisms, including risk adjustments and reinsurance.”

The claims by the governors defy facts, particularly on reinsurance. The Government Accountability Office concluded last year that the Obama administration violated the law to give insurance companies billions more dollars in reinsurance funds than they deserved—prioritizing corporate welfare to insurers over statutorily required payments back to the U.S. Treasury.

But even after the Obama administration violated the law to give insurers billions more than they were due, the governors still feel the need to propose two separate “stability” (read: bailout) funds to prop up Obamacare. It demonstrates the massive “cash suck” that Obamacare has placed on the federal fisc.

An Impractical Proposal on Federal Employee Coverage

The plan also suggests that Congress should “allow residents in underserved counties”—defined as those with only one insurer on the exchange—“to buy into the federal employee benefit program, giving residents in rural counties access to the same health care as federal workers.”

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