Congressman Leonard Lance (NJ-07) today introduced the ‘Taxpayer Bailout Protection Act’ continuing his effort started last Congress to eliminate the possibility of a taxpayer-funded bailout of insurance companies under ObamaCare. The legislation mandates that payments under the risk corridor program, the mechanism by which payments to insurance companies would be made, must be revenue neutral – meaning no taxpayer funds can be used to cover insurance company loses. Companion legislation will be introduced by U.S. Senator Bill Cassidy of Louisiana.
“ObamaCare’s risk corridor program poses two questions: does the law allow the administration to cover insurance company loses and are American taxpayers going to have to foot the bill?” said Lance, a member of the Energy and Commerce Health Subcommittee. “Taxpayers need to be protected from more bailouts and we need to ensure that the Administration is following the letter of the law. The ‘Taxpayer Bailout Protection Act’ will protect taxpayers from a potential financial liability.”
There are many serious questions regarding ObamaCare’s risk corridor program. As written in statute, there is no appropriation of funds for the purpose of administering the program. The program has the potential to operate at a significant cost to American taxpayers and is being managed outside of the Congressional appropriation process – unlawfully and without oversight. Last Congress, as Members of the House Energy and Commerce Health Subcommittee, Cassidy and Lance examined this possibility and saw that not only are taxpayer funds potentially being used as a bargaining chip to stabilize insurer exchange participation but the Administration is overreaching and acting outside of its statutory authority to use taxpayer funds. Without an appropriation from Congress, any payments delivered to cover the loses of insurers would be illegal, throwing into doubt whether payments already made to insurance companies were lawful.
“Many in Congress believe that any payment made to an insurance company under ObamaCare’s risk corridor program is not authorized by law. No where in statute does the Administration have the power to appropriate money to cover insurance company loses. I am pleased to join my colleague and friend Senator Cassidy again as we move this bicameral effort to tackle the two pressing elements of the risk corridor program: protecting taxpayers from more bailouts and ensuring that the Administration is following the letter of the law.”