The ObamaCare Bailout Fund Goes Belly Up

John HaywardA farewell to ERRP.
By John Hayward

12/15/2011

 

It’s supposed to be a shocking surprise that ObamaCare is murdering private insurance plans, but in truth, its many legislative midwives always knew that would happen.  They’re just surprised by the scale.

Consider the Early Retiree Reinsurance Program, or ERRP.  This was a program designed to subsidize 80% of the cost for insuring early retirees, whose benefits had been declining for many years, and were among the first items to be placed on corporate chopping blocks after ObamaCare was passed.  The program was given $5 billion in funding, to tide it over until the full magic of the “public exchanges” kicked in, circa 2014.

Instead, it’s going bankrupt on December 31st of this year.  Be sure to have your favorite national debt clock pulled up on your computer when those public exchanges go online, for even more spectacular evidence that the designers of ObamaCare were wrong about everything.

A staff report released Wednesday by the House Energy and Commerce Committee explains how ERRP blew through its five billion dollar budget “with remarkable speed”:

As of December 9, 2011, the ERRP had spent $4,533,811,755.13 of its $5 billion budget.  That number accounts for 91 percent of a budget that was intended to last for 1,310 days.  Instead, CMS spent it in 579 days, quickly doling out the vast majority of the money to unions that support the Administration and to large profitable corporations.  This accelerated rate raises serious questions about the overall spending estimates in PPACA.  If the Administration exhausted an entire $5 billion budget approximately three times faster than estimated, what does that portend for the accuracy of the cost estimates cited in support of the other expensive aspects of the trillion dollar health care reform law?

How much “portending” can you take, America?

The Committee report lists the top 20 recipients of EERP funding, which ate up nearly half of the $5 billion program between them.  In fact, if you extend the list to the Top 25 consumers, well over half of the funds are accounted for.  Number One is the United Auto Workers, already gifted with General Motors​ at taxpayer expense.  Twelve of them are state governments or public employee union funds, with Ohio taking the #3 spot at just over $180 million.  And, of course, one of President Obama’s favorite non-bankrupt companies, General Electric​, makes the list.

The House Energy and Commerce Committee renders an epitaph that should be carved upon the doors of Congress, or perhaps tattooed on the hands of legislators:

Administration officials have suggested that their ability to give away taxpayer money so quickly is simply evidence of the program’s popularity.  However, the ability to spend money quickly does not justify spending it in a wasteful manner.  Like PPACA itself, the ERRP simply threw money at a problem—here, the cost of retiree medical care—without doing anything to address the skyrocketing costs of that care.  The program had no rational basis or justification, and simply bailed out overextended state programs, wasted taxpayer money that otherwise could never have been justified or spent on a case-by-case basis, and unnecessarily doled out taxpayer funds  to some of the nation’s most profitable corporations.

ERRP was already in its death throes six months ago, when it stopped accepting new program applicants.  Now it will cover its last claim two years ahead of schedule.  It’s hard to look at such an astonishing degree of failure without wondering if you behold a program that was intended to fail.  Do we really want to find out what happens when the rest of ObamaCare is “overwhelmed?”

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Categories: America, Democrats, government, Health, Jobs, Lives, money, Obama, people, Republicans | Tags: , , , , , | Leave a comment

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