It's late December, which means it's that time of the year again. Yes, kids, gather round and hear the story of the giant up-or-down spending bill Congress passes every year!
Clocking in at 2,100 pages, this year's omnibus spending bill contains plenty of nuggets, but one of the more interesting ones, as it relates to the presidential election (and the future of health care, but who cares about that), is a provision tucked in through the effort of 2016 Republican presidential candidate Marco Rubio on ObamaCare's risk corridors.
What's a risk corridor, you ask?
It's a bit arcane, but here's the short version. When ObamaCare was up for debate, the administration needed to get insurers on board with a bill that would force them to take on many more risky people, so it offered them a deal: If insurers' profits are too low, then insurers get money from the government. If profits are "too high," then the government takes a cut. Basically, if insurance companies lose too much money from ObamaCare, the government will make sure they are made whole.
While a lot of politicians object to what is essentially a bailout agreement, most haven't done much to try to fix it.
Take, for instance, Ted Cruz, who is arguably becoming Marco Rubio's biggest rival in the 2016 race. Cruz's major claim to the Republican base is that he "stood up" against ObamaCare, leading the fight to shut down the government over defunding the law. But for all his talk, Cruz doesn't have any actual results to show for his efforts. Rubio has been less bombastic — but much more effective.
As the The New York Times and National Review have reported, while Cruz was gesticulating and shutting down the government and accomplishing nothing to actually frustrate ObamaCare, Rubio was leading the effort to stealthily pass a little provision that could essentially gut the law.
Rubio complained about risk corridors as early as 2013, writing in The Wall Street Journal that the provision would put the American people “on the hook for bailing out insurance companies." Rubio then announced he would introduce a bill to kill the risk corridors. A year later the Senate Budget Committee and the Obama administration worked out a deal that ostensibly leaves the risk corridors in place, but could actually undermine the whole law.
The deal that resulted from Rubio's efforts just mandates that risk corridors be deficit neutral. On the surface, that sounds mild. But in practice, this means that the risk corridors can't pay out the money, since those costs haven't been counted in the budget. It's not full-on repeal and replace, but it's actually set to become law.
It also achieves an important political goal, which is to make an ObamaCare replacement a necessity. Because, guess what, even though we were confidently informed when the law passed that risk corridors would never have to be used because everything would be a-okay, it turns out insurers are losing a ton of money on ObamaCare and are very much screaming for the risk corridors. And the deficit-neutral provision essentially neuters the risk corridors. This will increase the already inherent dysfunctions of the ObamaCare marketplace, meaning that any Republican administration will have political winds at its back to, wait for it, repeal and replace ObamaCare.
On both the policy and political fronts, in other words, it's a masterstroke. And unlike Cruz's nonexistent record, this move shows that Rubio can get things done in Congress. And as my Ethics and Public Policy Center colleague Yuval Levin notes in a very interesting post on the omnibus bill and health care, Democrats are — reluctantly, yes, but importantly — going along: "Most Democrats certainly don't think ObamaCare has been a failure. But they are increasingly coming to see that, even given their goals, it has been at least a dud. [...] They're thinking past ObamaCare, like the Republicans are."
In other words, if we have a Republican administration — particularly one that can get things done in Congress — the stage is set for a much better health care reform in 2016. And Marco Rubio played a key role in that.
