The only reason Obamacare hasn’t imploded already was due to Obama siphoning cash from another agency to prop it up
When President Donald Trump tweets out that Obamacare is on the precipice of imploding, it appears that he is not far off the mark. ¬†Failing insurance companies, Doctors leaving their practices, and even several regions like in the state of Arizona not even having a provider are just some of the consequences that have emerged in the three years since the Affordable Healthcare Act went active.
But now we are suddenly finding out that the scheme is much worse off than originally thought as a new report out from earlier in March shows that the Obama administration was having to siphon money from Fannie Mae and Freddie Mac just to sustain the promised subsidies to the states and individuals, and that method of robbing from Peter to pay Paul is very soon about to expire.
Earlier this month, Harvard Ph.D.¬†Jerome Corsi of InfoWars¬†(@jerome_corsi) and a CPA “who worked for two years for a major U.S. accounting firm as an outside auditor for Freddie Mac,”¬†confirmed¬†a 2012¬†scheme¬†hatched by the¬†Obama administration¬†to funnel¬†hundreds of billions in¬†dividends from Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac¬†to prop up the failing¬†Obamacare program – by paying subsidies to insurers to remain in the system.
The conclusion reached by Corsi and others is that this was probably¬†illegal.
In fact, House Republicans actually sued the Obama Administration in 2014 over the fact that the subsidies to insurers weren’t appropriated by congress¬†and won, which the Obama administration appealed. As Zerohedge and the¬†Atlanta Journal Constitution pointed out last week,¬†the Trump¬†administration has until May 22nd to decide whether or not to pursue the appeal:
In 2014, House Republicans sued the Obama administration over the constitutionality of the cost-sharing reduction payments, which had not been appropriated by Congress. The lawmakers won the lawsuit, and the Obama administration appealed it. Late last year, with a new administration on the other end of the suit, the House sought to pause the proceedings ‚ÄĒ with a deadline for a status update in late May.¬†–AJC
And a ZeroHedge analysis:
Of course, any decision to remove those subsidies would likely result in yet another massive round of premium hikes and further withdrawals from the already crippled exchanges where an astounding number of counties across the country have already been cut to just 1 health insurance provider.¬† And, as we’ve pointed out before, higher rates = lower participation = deterioration of risk pool = higher rates….and the cycle just repeats until it eventually collapses. ‚Äď Zerohedge
There is a reason why the U.S. budget has a annual deficit of over $1 trillion, the national debt is at or above $20 trillion, and the amount of unfunded liabilities is estimated to be in the ballpark of $250 trillion… and it is because the government has promised too much to too many people that they can’t possibly afford to give. ¬†And it is also why the only solution is to eliminate most of these welfare guarantees otherwise the entire system, not just Obamacare, will simply implode upon itself similar to what is taking place in states all around the country on over-promised and under-funded pensions.
The government has a long track record of stealing money from one agency or program to cover something else, as when former President Bill Clinton replaced real money from the Social Security fund with debt IOU’s known as U.S. Treasuries. ¬†And just as there will always be a day of reckoning for these con games such as in the Dot Com crash and 2008 financial crisis, so too are we coming upon the next great crisis that could show itself as soon as the month of May, and at a time when the government can no longer borrow any new money to deal with it.
Kenneth Schortgen Jr¬†is¬†a writer for The Daily Economist, Secretsofthefed.com,¬†Roguemoney.net, and Viral Liberty, and hosts¬†the popular youtube podcast on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.