Marco Rubio Looks to Close Obamacare's Risk Corridors

U.S. Sen. Marco Rubio, R-Fla., appeared on Greta Van Susterens show on Fox News on Wednesday night, weighing in against President Barack Obamas federal health-care law. Rubio pointed to risk corridors, included in the law, as a major fiscal liability. The interview went as follows:

Rubio: A risk corridor is basically a program whereby insurers are told, If you participate in this insurance marketplace and you miscalculate the amount of money that its going to cost you to insure these people, we will come in and make up for the difference. Thats a valid concept in a healthy insurance marketplace. The problem with Obamacare is it is not a regular insurance marketplace. In fact, its not an insurance marketplace at all. Its a high-risk pool where these companies are now guaranteed to lose money because not enough young, healthy people are signing up. And the result is the taxpayers, the people watching this program, are going to see their tax dollars going to private insurance companies to bail them out for their losses.

Greta Van Susteren: All right. To put it another way, I always think of insurance companies like gambling. And its like an insurance company going to Vegas and they say that, If you lose over $100, we will make the back end so you dont have to pay more than the $100 lost. Is that sort of the idea of a risk corridor? It limits the amount of your loss?

Rubio: It is. But it limits the amount of your loss for companies that miscalculate. In a regular, normal, healthy insurance marketplace, most companies are not going to do that. Youre just going to have a handful of anomalies that in any given year had something happen and they lost a lot of money. And so this reinsures against that risk. The problem is that with Obamacare its not just one or two companies, its going to be virtually every company in the exchanges losing money.

Van Susteren: I guess when you say the anomaly versus the non-anomaly that youre making the comparison to Medicare Part D, which also has that risk pool. And which many Republicans supported because they thought that was a more predictable pool. Is that the difference? I mean, I know you differentiate between Obamacare risk corridor and Medicare Part D.

Rubio: So Medicare Part D deals with a pool of enrollees that we understand very well. Its seniors. Its drug use, the prescription drug use. And we know what those patterns are and so companies could price it. With the Obamacare exchanges, its broad, its open-ended and its very unpredictable. Thats why all these companies are being downgraded by Moodys, because their initial filings early this year showed they expect to lose a lot of money because, as we predicted, young, healthy adults are not signing up in sufficient numbers for the exchanges.

Van Susteren: All right. So we wouldnt even get into this risk corridor problem if Obamacare met its numbers or predictions in terms of young, healthy people signing up to pay for the older, not so healthy people. Is that correct?

Rubio: Thats right. I mean, there might be a couple of companies here or there that may have miscalculated, but you wouldnt have this industry-wide problem that were now going to face. And the result is, in my opinion, there are going to be billions of dollars of taxpayer money needed over the next three years to bail out companies that miscalculated. And theres going to be a lot of them.

Van Susteren: All right, well it hasnt happened yet. And I realize that your legislation is because you predict it is going to happen because of the preliminary numbers showing that young, healthy people are not signing up. But Im curious, what do you want to do?

Rubio: Well, I think this should be repealed. This shouldnt be in the law. We shouldnt be having any sort of mechanism where companies that are guaranteed to fail are going to be bailed out through taxpayer dollars. And by the way, that was already going to happen at some level. It is now really going to happen because the president has lawlessly decided which parts of Obamacare to implement and which parts not to implement. The result is even less young, healthy people are signing up for the program.

Van Susteren: Without taking a position on whether Im for it or against it, Im curious, if you were successful in repealing it -- and I know its in the House and in the Senate, but it seems unlikely because its not going to go through the Senate -- but even if you were able to repeal it, what happens then? Because these insurance companies have all made bad bets based on numbers and so they are going to have an enormous problem. Theyve got to get the cash some place, or frankly theyre going to have real money problems.

Rubio: Well thats right. But again, many of these insurance companies were for Obamacare when it first came out. They thought this was going to be a huge bonanza for them. So they got involved in pushing for the law, advocating for the law. Many of them were at the table when it was drawn up. But of course, they always counted on this money being there for them on the back end. Thats not right. That isnt fair that people and companies who can afford to hire lobbyists come up here and figure out a way to get the taxpayers to bail them out for a program that doesnt work, was never going to work and is now worse than ever.

Van Susteren: And of course, you can always tell with some of these things like the risk corridor, it isnt written that if by some wild chance a lot of young, healthy people sign up, many more than anyone had expected, so they made a lot of extra money, the taxpayers wouldnt be getting any of that extra money on the back end. Isnt that true?

Rubio: Not only is that true, but a lot of this extra money that you are talking about is money that is government money, its taxpayer money anyway. Because dont forget that these exchanges are partially funded, significantly funded, by money thats coming through the subsidies that Obamacare provides. So, in essence, its already taxpayer money thats flowing into these companies and flowing into these plans.

Van Susteren: Let me say one thing though. This is a one-time deal, right? This is a sunset provision? This isnt going to go on forever, this risk corridor?

Rubio: Its for the first three years of the program. But again, TARP was a one-time deal and some of the other bailouts were a one-time deal. My bigger point is this: If Obamacare is so flawed that it needs to be bailed out with billions of dollars of taxpayer money, then it shouldnt be done. The law shouldnt exist. And this is one more example of why Obamacare is bad for the country and bad for taxpayers.