PPACA Sec. 1322: CO-OPs. Interesting.
Posted by stadler178 10 years, 6 months ago to Legislation
Now, I'm not passing a judgment on this, but I happened to be reading through the text of the Patient Protection and Affordable Care Act (huh, now I see why people just stick with "Obamacare", that's a mouthful, or I could do the acronym). It looks like the Secretary of Health is going to be awfully busy reviewing tons of reports from insurance companies, by the way, based on this law. Seems like a massive amount of government supervision is going to be involved. I don't know how much was involved prior to PPACA, but if they had to write it down in this law, I would think not nearly as much in the past.
Anyway, I noticed something while randomly skimming the massive law, in Section 1322. Basically, it says the Federal government will provide loans and grants to help start new insurance companies that will be non-profit (interestingly named 'CO-OPs') and will use any profits (which I thought would actually be called 'gains' if it's a non-profit, but let's not dwell on semantics) only to reduce premiums for members. Okay, so I guess the idea is profits (as in private industry) are bad, unless they're used in whatever way the government says they should be used. Obviously this means said profits cannot be used to improve or streamline the way the company does business, like in private industry--which could theoretically reduce premiums in its own way. Of course this is to say nothing of the other potential issues that will increase premiums.
The particularly interesting thing I read was in 1322 (g), which says that "There are hereby appropriated, out of any funds in the Treasury not otherwise appropriated, $6,000,000,000 to carry out this section." Huh?
So basically the government is helping to start up competitors in the insurance market and using $6 billion in taxpayer funds to do it. Congratulations. You just helped start a business without even knowing it! What? You weren't asked for permission to do that? Oh. Too bad. Pay up. Granted, the law also says said non-profits should have considerable private investment as well, but still, that's a lot of dough.
I have to wonder, if there is $6 billion sitting around 'not otherwise appropriated', why is there such a debate about the budget? I would assume that's the whole point of having a budget, so that there isn't money sitting around that hasn't been appropriated for some specific purpose. Based on the deficits I've seen, I have to assume this is $6 billion that the Treasury doesn't actually have to spend. That is to say, that they'll have to either borrow it or print it. I may be wrong, I'm still new at all this. But really, if they can't even pass a budget without wanting to defund PPACA, how are they going to get Congress to appropriate $6 billion to this sort of thing?
It's just curious, is all. Particularly when one ponders the impact on the market of a slew of government-funded, non-profit insurance companies that will take any profits and use them to reduce premiums. Imagine if the same thing happened with car companies. Again, I'm no expert, but I would imagine that it would signal Carpocalypse if that were to happen. The other companies would have quite an advantage. Using the car illustration may be apples and oranges, though, but hopefully my point is taken. Government essentially becomes, well, not so much a shareholder but certainly an investor here.
Assuming the above speculation on my part is correct, if that proved successful, one would imagine some serious harm being done to existent private insurance companies, probably resulting in those companies charging higher premiums to remaining customers as some customers decide to go to the CO-OPs. Or they could just implode altogether, if things got bad enough. This of course is added to the weight of dealing with folks who enroll with pre-existing conditions and whatever else the PPACA may add into the mix.
Maybe that's an extreme possibility. I could be totally off-base here, as it's just one section. In its defense, at least they concluded that section of the law by saying that private insurance companies and CO-OPs will all be bound by the same rules, so that it's a (paradox) 'level playing field'. But I can't help wondering how many other industries will soon have government CO-OPs...and where that takes us as a nation in the long run.
I look forward to hearing your thoughts on this.
Anyway, I noticed something while randomly skimming the massive law, in Section 1322. Basically, it says the Federal government will provide loans and grants to help start new insurance companies that will be non-profit (interestingly named 'CO-OPs') and will use any profits (which I thought would actually be called 'gains' if it's a non-profit, but let's not dwell on semantics) only to reduce premiums for members. Okay, so I guess the idea is profits (as in private industry) are bad, unless they're used in whatever way the government says they should be used. Obviously this means said profits cannot be used to improve or streamline the way the company does business, like in private industry--which could theoretically reduce premiums in its own way. Of course this is to say nothing of the other potential issues that will increase premiums.
The particularly interesting thing I read was in 1322 (g), which says that "There are hereby appropriated, out of any funds in the Treasury not otherwise appropriated, $6,000,000,000 to carry out this section." Huh?
So basically the government is helping to start up competitors in the insurance market and using $6 billion in taxpayer funds to do it. Congratulations. You just helped start a business without even knowing it! What? You weren't asked for permission to do that? Oh. Too bad. Pay up. Granted, the law also says said non-profits should have considerable private investment as well, but still, that's a lot of dough.
I have to wonder, if there is $6 billion sitting around 'not otherwise appropriated', why is there such a debate about the budget? I would assume that's the whole point of having a budget, so that there isn't money sitting around that hasn't been appropriated for some specific purpose. Based on the deficits I've seen, I have to assume this is $6 billion that the Treasury doesn't actually have to spend. That is to say, that they'll have to either borrow it or print it. I may be wrong, I'm still new at all this. But really, if they can't even pass a budget without wanting to defund PPACA, how are they going to get Congress to appropriate $6 billion to this sort of thing?
It's just curious, is all. Particularly when one ponders the impact on the market of a slew of government-funded, non-profit insurance companies that will take any profits and use them to reduce premiums. Imagine if the same thing happened with car companies. Again, I'm no expert, but I would imagine that it would signal Carpocalypse if that were to happen. The other companies would have quite an advantage. Using the car illustration may be apples and oranges, though, but hopefully my point is taken. Government essentially becomes, well, not so much a shareholder but certainly an investor here.
Assuming the above speculation on my part is correct, if that proved successful, one would imagine some serious harm being done to existent private insurance companies, probably resulting in those companies charging higher premiums to remaining customers as some customers decide to go to the CO-OPs. Or they could just implode altogether, if things got bad enough. This of course is added to the weight of dealing with folks who enroll with pre-existing conditions and whatever else the PPACA may add into the mix.
Maybe that's an extreme possibility. I could be totally off-base here, as it's just one section. In its defense, at least they concluded that section of the law by saying that private insurance companies and CO-OPs will all be bound by the same rules, so that it's a (paradox) 'level playing field'. But I can't help wondering how many other industries will soon have government CO-OPs...and where that takes us as a nation in the long run.
I look forward to hearing your thoughts on this.
