Latest Obamacare Carve Out a Boon to Big Insurance

“We can't have a system that works better for the insurance companies than it does for the American people…. And they will keep on doing this for as long as they can get away with it.”

-- President Obama in a March 8, 2010 speech at Arcadia University calling for passage of his health law.

The wealthy and well-connected seem to be having a much better go of getting exemptions from Obamacare.

When President Obama’s health legislation was teetering after the election of Sen. Scott Brown, the president and his administration went on the attack, ripping into the profits of Americas big insurance companies. He and his team said that those who oppose his law were putting “profits ahead of people.”

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Today, as the law lurches into full implementation, we learn that the administration has imposed another delay in a key provision of the law, this time to help the profits of those same insurance companies he once attacked.

The inside joke in Washington back in 2010 was that while Obama was sharpening the tines on his pitchfork for his populist push to get to final passage of the bill, much of the legislation had been crafted in consultation with industry lobbyists. Obama co-opted many in the industry of the industry with promises of protection and predictable profits, just as he did with the biggest drug companies.

But as he campaigned ahead of the law, Obama went on the attack, looking to not only keep his industry partners in line but scare off any Democrats getting queasy about the big costs and disruptions associated with the beleaguered bill.

One of the key selling points in Obama’s populist push was that the bill would set annual caps on out-of-pocket expenses demanded by insurers. Starting in 2014, the law sets the limit at $6,350 for individual policies and $12,700 for family plans.

But through a regulatory re-write slipped into the rule book in February, but first publicized in today’s New York Times, the administration has given big insurance companies a one-year delay on the caps.

The reason cited is a technical problem in getting new and existing computer systems in synch. But the move will also help prevent more rate shocks. Insurance premiums are set to rise precipitously next year as insurers are required to begin accepting patients with pre-existing conditions.
If the insurers were also required to absorb the cost of very expensive treatments not covered under plans, like new prescriptions for cancer treatment that cost more than $100,000 per year, at the same time, premiums would climb even higher.


With forecast rate hikes already causing agitation in the administration, these out-of-pocket caps would have to be seen as a liability. And for industry lobbyists, that would provide the perfect pressure point. Delay the cap and spare yourself more coverage of skyrocketing rates.

One of the upsides of having lobbyists present at the creation of the law and now having so many members of team Obama on the other side of the revolving door is that the lobbyists know just where to go to get what they want.
What about the 2009 and 2010 promises from Obama and his health law team, particularly Health Secretary Kathleen Sebelius, that they would smack down insurance companies who sought big rate hikes? Why didn’t they just tell insurance companies to pay for it out of their cushy profits?

Well, Sebelius has lately been in trouble for calling to raise money from the insurance industry to back her campaign to get more people to sign up for Obamacare. And Obama spent part of his evening last night at the Martha’s Vineyard home of Washington mega-lobbyist Broderick Johnson. Doubtful there was much pitchfork sharpening going on there.

Aside from the reverse co-opting of the president and his team, there’s this: The profits Obama demonized in 2010 aren’t big enough to pay for all the changes in the law. If Sebelius played hardball, other insurers would decide to get out of the business. Aside from disrupting coverage, it would mean less competition and… higher rates.

Obama has so far spared big business, big insurance and members of Congress from expensive provisions of the law. For regular folks, including the same union members who helped pass and protect the law, the exemptions don’t come so easily.

Instead of writing anguished letters, what those folks ought to be doing is hosting cocktail parties on the Vineyard or writing checks to the Health secretary’s campaign. That’s how you get attention in Obamaland.

And Now, A World From Charles

“[President Obama] goes out and says I will not allow Congress to stand in the way of x, y and z.  Congress stands in the way if it doesn't approve of something.  In banana republic, Caldio stands up and says I will not allow the old guard, I will not allow a constitution written by autocrats get in the way of helping the people.  That's not how we do it here”

Charles Krauthammer on “Special Report with Bret Baier.”

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on Catch Chris Live online daily at 11:30amET  at