Taxpayers Should Plan for Insurance Company Bailouts
Humana Chief Broussard Says Humana Will Not Reject Taxpayer Funds if it Incurs Losses on ObamaCare Exchange
Humana May Take up to $450 Million in Taxpayer Money from ObamaCare Risk Adjustment Provisions, Including the Risk Corridor
Taxpayers Should Not Be Forced to Shield Humana From Risky Business Decisions, Health Policy Expert Says
Tampa, FL / Washington, D.C. - Responding to a question about ObamaCare's risk corridors at Humana's shareholder meeting today, Humana President and CEO Bruce Broussard declined to promise that the health insurance industry giant will reject taxpayer bailouts. Broussard was responding to a question from David Hogberg, Ph.D. of the National Center for Public Policy Research, who asked, in part:
In February, Forbes reported that Humana planned to take up between $250 million and $450 million from the "risk adjustment mechanisms in ObamaCare" including the risk corridor. Then in March, the Obama Administration proposed changes to the ACA that may increase this potential bailout for insurers in 2015 by ballooning the amount that taxpayers may have to pay insurers for company losses.
The taxpayers are already on the hook for so much of this law. So, my question to you is, if the situation arises where Humana qualifies for taxpayer money through the risk corridor, can we get your promise that you will reject it?
No, we will not make that promise.
I think, as a supporter of our members and continuing to strive to ensure that our members have an affordable plan, that's one of the opportunities that is presented in being able to fulfill that.
One side comment to that, I think that's an important aspect of that as a result of the Affordable Care Act, that there is a significant industry fee that is helping support the... ah... particular reinsurance that you are referring to -- and risk corridors, and so on. The reinsurance fee for Humana this year is close to $700 million. That is not a tax-deductible expense -- so, in some ways, that particular reinsurance in all the corridors that you are referring to are... is actually financed by the industry overall.
Thank you for your question.
"I'm disappointed but not surprised by Broussard's response," Hogberg said. "Getting involved in the ObamaCare exchanges is risky, and insurers would be much less likely to take that risk unless a government bailout was in place. Nevertheless, taxpayers shouldn't be forced to shield Humana or any other insurance company from risky business decisions."
David Hogberg is one of the nation's leading health care policy analysts, and a frequent media commentator on health care issues. So far in 2014, he has been a TV or radio guest 85 times, and been cited by newspapers over 100 times. Various publications by Dr. Hogberg are available here, and his March 11 testimony at the U.S. Senate on the problems with government-run health care systems can be viewed here.
David Hogberg appeared at the Humana meeting representing National Center Chairman Amy Ridenour, a Humana shareholder.
The National Center's Free Enterprise Project is a leading free-market corporate activist group. In 2013, Free Enterprise Project representatives attended 33 shareholder meetings advancing free-market ideals in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, media bias, gun rights and many other important public policy issues. Today's Humana meeting was the National Center's 13th attendance at a shareholder meeting so far in 2014.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, three percent from foundations, and three percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.
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