Republicans take aim at health-care provision; CBO chief forecasts reduced unemployment

February 5

Congressional Republicans took aim Wednesday at a provision of the health-care law that they claim amounts to “an insurance company bailout,” using a House oversight hearing to push for the measure’s repeal.

In a separate House committee hearing, Democrats countered what has emerged as a key GOP talking point by eliciting testimony from the Congressional Budget Office director that the Affordable Care Act would reduce unemployment over the next few years by boosting overall demand for goods and services.

Testifying before the House Committee on Oversight and Government Reform, Sen. Marco Rubio (R-Fla.) promoted legislation he has introduced in the Senate to repeal a provision of the Affordable Care Act known as “risk corridors,” which are designed to limit the losses and gains of health insurance plans during the first three years they are sold on the law’s new exchanges.

Republicans have discussed linking repeal of the provision to a one-year increase in the federal debt ceiling, an issue that is again coming up for debate. A deal to temporarily suspend the debt limit was reached in October but is due to expire Friday. In their statements to the House panel Wednesday, neither Rubio nor the Oversight Committee chairman, Rep. Darrell Issa (R-Calif.), mentioned linking repeal of the risk corridors to a debt-ceiling increase.

“This law has so many flaws that it cannot be fixed,” Rubio told the committee. “The American people should not have to pay for another taxpayer-funded bailout.” He added; “The bottom line is that it is not right to allow a powerful industry to use its influence in Washington to protect itself” from the health-care law.

But Rep. Elijah E. Cummings (Md.), the top Democrat on the committee, argued that the risk corridor program was originally a Republican idea, and he cited a new Congressional Budget Office report that projects net gains of $8 billion over the next 10 years from the program.

“The irony of this Republican attack is that Republicans first proposed these measures as part of the 2003 law to create the Medicare Part D drug benefit,” Cummings said, noting that GOP leaders, including Issa, had voted for them.

“The risk corridor program was a good idea during the Bush administration, and it worked,” Cummings said. “Rather than a ‘bailout’ for insurance companies, the program has resulted in $7 billion in net gains to taxpayers. But now — since these same mechanisms are part of ‘Obamacare’ — Republicans argue that they are a ‘bailout’ for insurance companies.”

House Republicans were “desperately searching for something to attach to the debt-ceiling legislation,” Cummings charged. “They could not simply pay our nation’s debts. They had to come up with something — anything — to politicize the issue.”

In his statement to the committee, Rubio said that “under normal circumstances, risk corridors are a viable program” that can prevent disruptions in services and protect taxpayers. But he argued that the Affordable Care Act does not constitute normal circumstances and that “the chances of a bailout have increased significantly” in recent months.

He also disputed comparisons to Medicare Part D, saying that “these are two fundamentally different programs.”

Testifying before the House Budget Committee in a separate hearing, Congressional Budget Office Director Douglas W. Elmendorf acknowledged that the new health-care law is expected to boost demand for labor, thus spurring employment.

Republicans are interpreting the findings of a new CBO report on deficits and the Affordable Care Act to mean that the law will kill more than 2 million jobs. The study, “The Budget and Economic Outlook: 2014 to 2024, says that about 2.3 million Americans who would otherwise rely on a job for health insurance will quit working, reduce their hours or stop looking for employment by 2021 because of new health benefits available under the health-care law.

In questioning Elmendorf, Rep. Chris Van Hollen (Md.), the top Democrat on the committee, cited the CBO’s finding that the law will “boost overall demand for goods and services over the next few years,” This is because people benefiting from its expansion of Medicaid and insurance subsidies will likely have extra money to spend, which “will in turn boost demand for labor over the next few years,” the report says.

“When you boost demand for labor in this kind of economy, you actually reduce the unemployment rate, because those people who are looking for work can find more work, right?” Van Hollen asked Elmendorf.

“Yes, that’s right,” Elmendorf said. He said the CBO thinks the effect will be to “reduce unemployment over the next few years.”

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