Rubio can fix his earlier sabotage of Affordable Care Act

Florida Sen. Marco Rubio says the Affordable Care Act “is an absolute failure” with “rising premiums” and “a collapse of the individual insurance market.” Now with the House health care bill passed, Rubio has an opportunity to act on changes. The Sun Sentinel editorial on May 7 calls on Rubio to act by helping “his colleagues reject the House bill and instead fix the bugs in Obamacare.”

Floridians can help Rubio recognize benefits in fixing Obamacare by reminding him how he helped instigate the very premium hikes and market exits by insurers he criticizes. As Ryan Hills in Forbes suggests, Sen. Rubio “may go down” in history, “as the silent killer of Obamacare.” Not a favorable designation with Obamacare’s growing popularity.

The “reinsurance” and “risk-corridor” programs were set up in the Affordable Care Act to help stabilize the market and premiums through 2016. In reinsurance, insurers got an extra premium payment for higher-cost consumers. In the riskcorridor program, insurers with a profit contributed a portion to a fund redistributed to insurers losing money to partially cover losses.

Originally, federal monies would augment the insurer riskcorridor fund. But Rubio called the risk-corridor program a “bailout” and moved to kill it in 2013. He succeeded when the Republican Congress eventually prevented the use of federal funds in the program.

The aftermath of 2014 then arrived. Insurers underpriced premiums in an unfamiliar market with a yet stable risk pool leaving the risk-corridor fund with only $362 million to cover losses of $2.87 billion. So, only 12.6 percent of program-specified losses could be covered since supplemental federal monies were precluded by Congress.

And Rubio made sure he told Floridians how he “succeeded in saving taxpayers over $2.5 billion” in 2014. An amount, ironically, far less than the tens of billions in federal funds ($15 billion in 2018 alone) in the current House health care bill for initiatives like state high-risk pools.

On Feb. 9, the U.S. Court of Federal Claims actually ruled that the federal government failed to meet its obligation in the risk-corridor program, a failure (initiated by Rubio) adding to market uncertainty for insurers.

Not surprisingly, with the risk-corridor program neutered and reinsurance ended in 2016, insurers increased premiums in 2017 to recoup losses and hedge future bets.

Interestingly, the Medicare Part D drug benefit passed by President George W. Bush and a Republican Congress has an ongoing risk-corridor program today. Mr. Rubio, why is a risk-corridor program okay for “Bushcare” but not Obamacare?

Health economist Austin Frakt says reinstatement of reinsurance and risk-corridor programs in the ACA can “help stabilize the marketplaces” and “draw insurers into markets, keep them there, and limit premium growth.” The McKinsey Center for U.S. Health System Reform also found “reinsurance provides more predictability in a more efficient way” than high-risk pools in stabilizing insurers’ market risk.

Sen. Marco Rubio has a rare opportunity. By choosing to fix the Affordable Care Act, rather than destroy it, he can amend his place in history.