Homeowner Flood Insurance Affordability Act of 2014—Motion to Proceed—Continuedby Senator Marco Rubio
Posted on 2014-01-16
RUBIO. Mr. President, I am going to get to another issue in a
moment, but there is a special anniversary in Florida I wish to
commemorate, and it is Naval Air Station Pensacola which is now
celebrating its centennial anniversary. NAS Pensacola, as it is more
commonly known, is a Florida institution and is known as the Cradle of
The first naval airplane flight from Pensacola took place on February 2, 1914. Over 325,000 alums have gone on to bravely serve with honor in our wars, and they have also delighted crowds across the country as part of the Blue Angels. They have made their mark on the Florida Panhandle and on our Nation's defense in the process.
In fact, one of our colleagues, John McCain, trained there. He of course went on to serve our country heroically and admirably and then has also served us in the Senate. Others who have passed through there include many NASA astronauts. Alan Shepard, Neil Armstrong, among others, began their aviation careers at NAS Pensacola, and of course eventually went on to become astronauts and made an immeasurable impact on American and world history.
NAS Pensacola is also the final resting place for thousands of fallen warriors at the Barrancas National Cemetery, a place which truly humbles visitors and reminds us to be thankful that America has been blessed with so many courageous patriots throughout our history.
Today there are over 17,000 service men and women who continue their service to America at NAS Pensacola, and there are an additional 7,000 civilians who support the base's operations. They are part of a real community, where parents are raising their kids, and where many veterans who once served there decide to make it their permanent home. We are proud of this in the Florida Panhandle. It makes our State a better place.
So as the celebrations get underway this weekend, I join our State and our entire Nation in celebrating 100 years of military excellence at NAS Pensacola. We truly give thanks to all the brave men and women who have made this military installation the crown jewel of our national defense and contributed to America's exceptional history.
ObamaCare Taxpayer Bailout Prevention Act I also wish to take a moment to talk about an emerging problem with the health care law which has only begun to filter out in the news cycle but bears watching in the days and weeks to come.
As we all know, a key part of the health care law is the exchanges, which are theoretically supposed to be competitive private marketplaces where individuals can go online either through their State exchange or the Federal exchange and buy health insurance at a competitive price, and they can choose between different plans. That is the idea behind a health exchange.
In and of itself, the idea of an exchange is not a bad one, if appropriately administered and it doesn't come accompanied with all the other things the health care law came accompanied with. But there is a problem with the way the exchanges are now designed which has not yet received the attention it deserves but, I promise, we are going to be hearing a lot about in the days to come.
The technical term is risk corridors. What it basically means is companies that participate in an exchange or a marketplace of insurance are told there is a reinsurance plan in place which will protect them in case of loss or catastrophic loss.
For example, let's say you are an insurance provider and go into a marketplace, and then it turns out the demographics of the groups that signed up for your plans didn't turn out the right way or there was an enormous spike in health care costs, whatever it may be, and you suffered dramatic losses. A risk corridor is in place to protect you.
The reason is, No. 1, a safety net per se for the industry on a short-term basis. The reason that is important is because we want patients' bills to be paid and their providers' bills to be paid. The problem is applying that to the health care exchange is going to prove extraordinarily problematic.
What has happened over the last few weeks, as we predicted would happen, is not enough young people are signing up through the exchanges. In order for health insurance to work, you have to have enough younger and healthier people on it. If you have a health insurance plan largely composed of people guaranteed to get sick, economically it doesn't work. There is no dispute about that.
In fact, by the administration's own statistics, they say at least 38 percent of the enrollees in the exchanges had to be under the age of 34 in order for the exchanges to work in an actuarially sound way.
So based on the assumption that was going to happen, insurance companies bid on these exchanges, offered a product and have begun to sign up people. The problem is so far that figure is not being met.
The numbers are just starting to come in. We don't know the full picture yet, but the trends are troubling.
No. 1, not enough people are signing up. The target goal is a total of about 7 million people or more by a deadline which has now been extended to March 31. The number is less than 2.2 million. There are still 8 weeks left or so, so we will see what happens, but the trends are not positive.
Here is an even more troubling trend: Only 30 percent of national enrollees are from that demographic I described. Only 30 percent are under the age of 34. In Florida, it is only 25 percent.
Here is the fundamental problem we have right now with the exchanges, beyond all the other ones we have already discussed ad nauseam: Not enough people are signing up and not enough people under the age of 34 are signing up.
The result is that the way this is trending now, the exchanges are becoming more like a high-risk pool and less like a true competitive exchange. Here is why that is problematic: If companies lose money, as they are going to if we look at these figures and as the companies themselves anticipate--in fact, in some of the early disclosures these companies are making, [[Page S431]] we are starting to see the forecast of losses.
If these trends continue and companies lose money because not enough people under the age of 34 signed up for them and not enough people signed up, under the ObamaCare law they will be entitled to a payout from the high-risk pool. This is a program in place for the first 3 years of these exchanges.
What that means is a taxpayer-funded bailout of ObamaCare. For taxpayers of the United States, this means your money is going to go from your pocket into the pocket of these private companies.
What the private companies will tell us is: Look. We bid on this product when you said the rules were going to be this. But since then you changed the rules even more, and so what was already bad has gotten worse.
There is not enough awareness about this, but we are going to be hearing about it in the weeks to come. As we get closer to the reality that billions of dollars in taxpayers' money is going to be used to bail out these exchanges, there is going to be growing outrage around the country and people are going to want answers. I hope my colleagues are starting to think about what we need to do.
That is why I filed a bill in November called the ObamaCare Taxpayer Bailout Prevention Act. What it would do is eliminate this provision which allows for the tax-funded bailouts of these exchanges.
As we get closer to this problem, the numbers are as bad or worse than we anticipated. So in the months to come, here is what we can expect to see: First, we can expect to see that companies are now going to say: We need our money. Under the law, we were promised this high-risk bailout. We signed up for it under that assumption. Now we need taxpayer money.
I predict the second thing we are going to see is as companies begin to prepare their filings for next year, some companies are going to decide that they are not participating in ObamaCare exchanges next year at all, which means less choice and less competition and, therefore, higher premiums. Other companies are going to say: We will participate but only at these premiums; and they are going to be significantly higher than the ones we have seen this year, meaning it will be even less affordable, meaning even less people under the age of 34 will sign up, meaning even more money will have to go from the taxpayer to bail out these exchanges.
We are still in mid-January and these numbers could change, but nobody realistically expects them to. In fact, I have yet to hear from anyone knowledgeable about this subject who has said to me: Oh, don't worry. In the next 8 weeks, another 5 million to 6 million will sign up and we are going to get to over 30 percent of national enrollees. We are going to get to over 38 percent of the people signing up being in the demographic of 34 or under.
So it is only mid-January. But I come to the floor to sound the alarm that this is coming so people across this country know we are weeks and months away from transferring potentially billions of dollars from taxpayers to private companies to bail out these exchanges. I promise you, this will not be the last time we hear about this.
I encourage my colleagues, as they go home on this recess and talk to people, get informed about this subject because we are going to be hearing a lot about it in the weeks and months to come. This is a very serious threat--to the law itself, by the way. This is unsustainable.
At a time that we have a $17 trillion debt, when so many Americans are struggling to find employment which pays them enough to live off of, when so many Americans have seen the jobs they once had disappear and cannot find a job to replace it, when so many Americans are struggling with a growing cost of living in every aspect of their lives--childcare, student loans, utility bills, you name it--to be told that at a time when all of these challenges are happening in the personal economies of so many people that billions of dollars of taxpayer money is going to go to bail out this law, there is going to be collective outrage across the political spectrum in this country and rightfully so.
Here is the last point I would make: If this law has to be bailed out, it is one more reason why it doesn't work. These exchanges are supposed to be private competitive marketplaces, where companies could actuarially and soundly price a product and sell it at an affordable rate. That is not where they are headed. We are headed toward a day soon, as early as next year--and we will see the filings this year-- when companies are going to decide either not to participate or to participate but only if they can charge substantially higher premiums with higher copayments and higher deductibles; and, on top of that, the only way they will participate is if they are promised this bailout.
We are going to hear a lot about this in the weeks to come, and I encourage my colleagues--irrespective of how you feel about this law, I cannot imagine any of us believing we are at a time in our Nation's history, given the challenges we face now, where we should be bailing out this plan with taxpayer money being transferred to private companies to keep them in business.
That is where we are headed and we better be able to do something about it soon, because people are not going to stand for it.
I yield the floor.
Thanking Members Mr. SANDERS. Mr. President, as chairman of the Senate Veterans' Affairs Committee, I take a moment to thank all the members of that committee for their hard work over the last year. At a time when there is obviously an enormous amount of divisiveness and partisanship here in the Senate, I am happy to report that by and large there has been a great deal of bipartisan effort being made in the Veterans' Affairs Committee, and I think very productive work as well.