A group of Republican senators -- led by Marco Rubio of Florida -- sent a letter to House Speaker John Boehner and are calling on him to oppose any spending legislation for a program that's part of President Obama's Affordable Care Act -- a move that could potentially result in a government shutdown. [...] If the House refuses to allow the provision into the spending bill -- which would be vehemently opposed by the White House -- a stalemate and government shutdown could occur. To avoid a shutdown, lawmakers will have to pass new spending legislation in the lame duck session before Dec. 11, which is when the current continuing budget resolution expires.
The argument goes like this: Under Obamacare, insurance companies must sell policies to everyone equally, regardless of pre-existing conditions, so there is a chance that some insurers could wind up with a larger-than-expected number of unhealthy customers. The risk corridor provision provides protections from that possibility until 2016. The cost is covered by other insurance companies, which pay into the risk corridor fund when they set their own premiums much higher than was needed to cover their expenses. Proponents argue the provision will help level out premiums and smooth over entry into the program as insurers learn how to accurately price policies in the new marketplace. The non-partisan Congressional Budget Office has estimated that the provision will actually save the government $8 billion over the next three years.
What’s most remarkable about their comments on risk corridors is that Republican leaders are denouncing a model they created to smooth out rate increases in prescription drug coverage under Medicare. When Senate Minority Leader Mitch McConnell voted in 2003 to create Medicare Part D, he called the law “the most important social legislation … in my memory” and said it provided “a genuine opportunity for the private sector to actually compete in offering this new drug benefit.” House Republican Leader John Boehner made similar comments, noting in 2007, “By almost every measure, this drug benefit has exceeded expectations, and it continues to score high marks among seniors for providing big savings on their prescription costs.”An innovative part of the law McConnell and Boehner voted for was its “risk corridors” program, a new idea back in 2003. The corridors are a mechanism to distribute or balance risks across insurance companies, so that those that sign up healthier enrollees help those that attract sicker enrollees. Under the program, if insurers’ actual costs for medical claims are more than 3 percent below their expected costs, they will transmit a portion of their profits into the federal Treasury. Those funds will then be redistributed to insurers whose actual costs exceed their expected costs by more than 3 percent. The provisions were included in Medicare Part D to give the insurers confidence to enter a new market. And they worked.