The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall’s congressional elections.
Administration officials for months have denied charges by opponents that they plan a “bailout” for insurance companies providing coverage under the healthcare law.
They continue to argue that most insurers shouldn’t need to substantially increase premiums because safeguards in the healthcare law will protect them over the next several years.
But the change in regulations essentially provides insurers with another backup: If they keep rate increases modest over the next couple of years but lose money, the administration will tap federal funds as needed to cover shortfalls.
Although little noticed so far, the plan was already beginning to fuel a new round of attacks Tuesday from the healthcare law’s critics.
“If conservatives want to stop the illegal Obamacare insurance bailout before it starts they must start planning now,” wrote Conn Carroll, an editor of the right-leaning news site Townhall.com.
On Capitol Hill, Republicans on the Senate Budget Committee began circulating a memo on the issue and urging colleagues to fight what they are calling “another end-run around Congress.”
