{"id":4011,"date":"2016-02-18T09:46:55","date_gmt":"2016-02-18T14:46:55","guid":{"rendered":"http:\/\/www.dougsbriefcase.com\/blog\/?p=4011"},"modified":"2016-02-18T09:46:55","modified_gmt":"2016-02-18T14:46:55","slug":"will-hhs-get-away-with-a-3-5-billion-heist","status":"publish","type":"post","link":"https:\/\/www.dougsbriefcase.com\/blog\/will-hhs-get-away-with-a-3-5-billion-heist\/","title":{"rendered":"Will HHS<\/span> Get Away With A $3.5 Billion Heist?"},"content":{"rendered":"

<\/p>

\"CMS<\/a>

CMS<\/span> admin\u00adis\u00adtra\u00adtor Andy Slavitt is plan\u00adning to short the U.S. Trea\u00adsury $3.5 bil\u00adlion. Will Con\u00adgress and pres\u00adi\u00adden\u00adtial can\u00addi\u00addates talk about it? [Credit:nextgov]<\/p><\/div>The Depart\u00adment of Health and Human Ser\u00advices (HHS<\/span>) announced<\/a> Fri\u00adday night that it was in the process of short\u00ading the U.S. Trea\u00adsury $3.5 billion.\n

Well, they didn\u2019t exact\u00adly announce it.  You had to read between the lines.<\/p>\n

The theft of $3.5 bil\u00adlion will help prop up insur\u00aders that have agreed to sell Oba\u00admacare poli\u00adcies in the indi\u00advid\u00adual mar\u00adket.  Behind all the hap\u00adpy talk from Admin\u00adis\u00adtra\u00adtion offi\u00adcials about the program\u2019s suc\u00adcess lies an unpleas\u00adant truth: insur\u00aders that par\u00adtic\u00adi\u00adpate in Oba\u00admacare exchanges are bleed\u00ading money.<\/p>\n

Those loss\u00ades are com\u00ading despite bil\u00adlions of dol\u00adlars in hand\u00adouts the gov\u00adern\u00adment is pro\u00advid\u00ading the indus\u00adtry.  Some of those hand\u00adouts are entire\u00adly law\u00adful; oth\u00aders, not so much.<\/p>\n

The so-called \u201crein\u00adsur\u00adance\u201d pro\u00adgram falls into the lat\u00adter cat\u00ade\u00adgo\u00adry.   Under this pro\u00adgram, near\u00adly every man, woman and child with health insur\u00adance is qui\u00adet\u00adly being taxed a total of $107 in 2015 and 2016.  For a fam\u00adi\u00adly of four, that tax amounts to $428.<\/p>\n

The tax isn\u2019t report\u00aded on your W\u20112 because, the gov\u00adern\u00adment rea\u00adsons, it is not a tax.  It is a con\u00adtri\u00adbu\u00adtion you\u2019re required to make \u2013 or, more accu\u00adrate\u00adly, that your employ\u00ader or insur\u00ader is oblig\u00aded to make on your behalf \u2014 to help insur\u00adance com\u00adpa\u00adnies that sell Oba\u00admacare poli\u00adcies keep their heads above water.  The gov\u00adern\u00adment has been col\u00adlect\u00ading the mon\u00adey from the pre\u00admi\u00adums that are sup\u00adposed to pay for your family\u2019s med\u00adical care with\u00adout both\u00ader\u00ading to let you know.<\/p>\n

Last year, these assess\u00adments were sup\u00adposed to raise $12 bil\u00adlion.  Of that sum, HHS<\/span> was required to remit $2 bil\u00adlion to the U.S. Trea\u00adsury, leav\u00ading $10 bil\u00adlion to be dis\u00adtrib\u00aduted to com\u00adpa\u00adnies sell\u00ading Oba\u00admacare poli\u00adcies.  But the assess\u00adments you paid only raised a bit less than $10 bil\u00adlion, more than $2 bil\u00adlion short of the total.<\/p>\n

What to do?  The Oba\u00admacare statute itself answers that ques\u00adtion plain\u00adly and unam\u00adbigu\u00adous\u00adly: pay Trea\u00adsury its $2 bil\u00adlion first, then dole out the rest to insur\u00adance com\u00adpa\u00adnies (sec\u00adtion 1341(b)(4)<\/a>).<\/p>\n

But in a remark\u00adable post<\/a> that appeared last month on the Forbes web\u00adsite, Uni\u00adver\u00adsi\u00adty of Hous\u00adton pro\u00adfes\u00adsor Seth Chan\u00addler wrote about the astound\u00ading deci\u00adsion HHS<\/span> made: in defi\u00adance of the Oba\u00admacare statute, it would stiff the U.S. Treasury.<\/p>\n

All of the mon\u00adey would be dis\u00adtrib\u00aduted to health insur\u00adance issuers that sold Oba\u00admacare poli\u00adcies in the indi\u00advid\u00adual mar\u00adket.  The Trea\u00adsury would not receive a dime.  Almost no one \u2013 save for Chan\u00addler \u2013 noticed.<\/p>\n

Hav\u00ading got\u00adten away with the heist last year, CMS<\/span> dou\u00adbled down.  It announced on Feb\u00adru\u00adary 12 that it would filch an addi\u00adtion\u00adal $1.5 bil\u00adlion from the Trea\u00adsury this year, bring\u00ading the two-year total to $3.5 billion.<\/p>\n

And they just might get away with it.  The issue is obscure enough, com\u00adpli\u00adcat\u00aded enough and impor\u00adtant enough to Obamacare\u2019s sur\u00advival that the agency will like\u00adly stand its ground even if Con\u00adgress were to call it out.<\/p>\n

None of the obvi\u00adous reme\u00addies avail\u00adable to HHS<\/span> are palat\u00adable.  The agency could reverse course and obey the law, but that would be dis\u00adas\u00adtrous for insur\u00adance com\u00adpa\u00adnies.  This year\u2019s assess\u00adments are expect\u00aded to total $6.5 bil\u00adlion, accord\u00ading to the Feb\u00adru\u00adary 12 announce\u00adment.  Pay\u00ading Trea\u00adsury the $3.5 bil\u00adlion the law requires would mean short\u00ading insur\u00aders by that amount.  Most of those com\u00adpa\u00adnies have been absorb\u00ading loss\u00ades sell\u00ading an unap\u00adpeal\u00ading prod\u00aduct, loss\u00ades that are pil\u00ading up despite bil\u00adlions in gov\u00adern\u00adment hand\u00adouts.  If HHS<\/span> were to pay them less than it has promised, many might decide to stop sell\u00ading on the exchanges, a polit\u00adi\u00adcal out\u00adcome unac\u00adcept\u00adable to the Administration.<\/p>\n

Alter\u00adna\u00adtive\u00adly, they could increase the assess\u00adments on you.  You haven\u2019t noticed them so far (nei\u00adther the gov\u00adern\u00adment nor your employ\u00ader has told you about them), so would you real\u00adly notice if HHS<\/span> were to increase them?  The prob\u00adlem is that orga\u00adnized labor is very much aware of them.  They have long object\u00aded to the assess\u00adments, which adverse\u00adly affect their mem\u00adbers.  They sure\u00adly would object were HHS<\/span> to meet its legal oblig\u00ada\u00adtions by hik\u00ading the amount it takes from group health plans.<\/p>\n

The Admin\u00adis\u00adtra\u00adtion is no more like\u00adly to snub the unions than it is to stint on pay\u00adments to insur\u00adance com\u00adpa\u00adnies.  So HHS<\/span> can be expect\u00aded to con\u00adtin\u00adue to defy the law.<\/p>\n

Con\u00adgress could, of course, call atten\u00adtion to this heist.  So could pres\u00adi\u00adden\u00adtial can\u00addi\u00addates.  Mar\u00adco Rubio took a lead\u00ader\u00adship role in clamp\u00ading down on a sep\u00ada\u00adrate Oba\u00admacare bailout scheme a few years back.<\/p>\n

He and his rivals might want to take a care\u00adful look at this one as well.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Depart\u00adment of Health and Human Ser\u00advices (HHS<\/span>) announced Fri\u00adday night that it was in the process of short\u00ading the U.S. Trea\u00adsury $3.5 bil\u00adlion. Well, they didn\u2019t exact\u00adly announce it.  You had to read between the lines.<\/p>\n","protected":false},"author":3,"featured_media":4013,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","wp_typography_post_enhancements_disabled":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"nfd_image_url":"","nfd_onboarding_generated":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[16,124,1238],"tags":[1270,51,401,119,623,122,1188,716,1271],"class_list":["post-4011","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health-care","category-obamacare","category-uninsured","tag-andy-slavitt","tag-cms","tag-exchanges","tag-health-insurance","tag-health-insurance-exchanges","tag-hhs","tag-obamacare","tag-reinsurance","tag-seth-chandler"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t