Krauthammer: 'Huge Gov't Bailout' of Health Insurance Industry at End of 2014

December 23, 2013 - 6:19 AM

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Image from Fox News's 'O'Reilly Factor'

(CNSNews.com) - President Obama, by issuing new rules that erode Obamacare's "financial structure," is putting the health insurance industry -- and taxpayers -- at risk, author and conservative political analyst Charles Krauthammer said on Sunday.

"The insurers understand that they're going to be completely ruined," Krauthammer said on "Fox News Sunday" with Chris Wallace. "And what's going to happen as a result of this? There's only one way out, a huge government bailout of the insurers is waiting at the end of next year."

That's the issue Republicans should be focusing on right now, Krauthammer said.

On Thursday, the Obama administration unilaterally delayed another provision of the law, saying there will be no tax penalty for people who had their existing health insurance canceled because of the Affordable Care Act and who did not find new coverage as required by law.

"There still may be a small number of consumers who are not able to renew their existing plans and are having difficulty finding an acceptable replacement," Health and Human Service Secretary Kathleen Sebelius wrote to Senate Democrats. "These consumers should qualify for this temporary hardship exemption," the Associated Press quoted her as saying.

Krauthammer on Sunday said insurers "are apoplectic" about all the rule changes because it exempts another important group from the exchanges.

"And these are people who were probably healthier, and the younger ones, who are going to be outside of the exchanges. Which means that the cost to insurers of people left in the exchanges is going to be exorbitant."

By exempting people who had their existing insurance policies canceled, "there is no way you can fine people who didn't have insurance in the past," Krauthammer continued. "So, you're going to have an abolition of the individual mandate. You've already postponed, abolished the employer mandate. The insurers understand that they're going to be completely ruined."

A government bailout is the only thing that can save Obamacare, and Krauthammer said the bailout "ought to be stopped before it happens. It ought to be -- Congress ought to say no bailout, particularly because this is not a natural disaster, it's a man-made disaster."

The Heritage Foundation -- and Sen. Marco Rubio (R-Fla.) -- are among those who also  have warned about Obamacare's risk to taxpayers.

Writing in The Wall Street Journal in November, Rubio noted that under the Affordable Care Act, "risk corridors were established for the law’s first three years as a safety-net for insurers who experience financial losses. While risk corridors can protect taxpayers when they are budget-neutral, ObamaCare’s risk corridors are designed in such an open-ended manner that the president’s action now exposes taxpayers to a bailout of the health-insurance industry if and when the law fails."

At his news conference on Friday, President Obama said the rule change announced on Thursday "is essentially an additional net in case folks might have slipped through the cracks."

Obama, in response to a question, said "absolutely," the individual mandate will be enforced. That means most, but not all, people will be fined for not purchasing insurance that meets standards set by administration bureaucrats.