How Obamacare, Like Medicare, Royally Screws Young People

So Rep. Nancy Pelosi (D-Calif.) is "ecstatic" over today's Supreme Court ruling that the Affordable Care Act, a.k.a. Obamacare, has passed constitutional muster. As are many others.

But the youngsters out there, especially those who bought into President Obama's message of hope and change, should make sure they understand how his signature achievement is going to screw them even more royally than Medicare already does. Avik Roy at Forbes lays it out thus:

Obamacare forces insurers to charge their eldest beneficiaries no more than 3 times what they charge their youngest ones: a policy known as “community rating.” This, despite the fact that these older beneficiaries typically have six times the health expenditures that younger people face. The net effect of this “community rating” provision is the redistribution of insurance costs from the old to the young.

That's for premiums in the much-discussed and yet-to-be realized government exchanges for health care. The same principle is already at work to various degrees in community rating pools for workplace-provided insurance.

In the August/September issue of Reason (on newsstands now but not yet online), I've co-authored a piece about "Generational Warfare" with Veronique de Rugy in which we document the ways in which the old-age entitlements of Social Security and Medicare systematically loot the relatively young and relatively poor to pay benefits to the relatively old and relatively rich. Obamacare is simply the latest variation on that awful dynamic.

Nick Gillespie is co-author with Matt Welch of The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America, now out in paperback with a new foreword.

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  • wareagle||

    so, basically, Roy is saying this is welfare for the elderly, whether they need it or not. We are rapidly running out of Peters, as in the folks govt robs in order to give to the Pauls, thereby ensuring the support of said Pauls.

  • Registration At Last!||

    This kind of like saying that a law requiring apartment buildings to have indoor heating screws over one group of people who are happen to be alive in the summertime and helps some other group of people who happen to be alive in the wintertime.

    Last time I checked "the young" are people who are going to be "the elderly" at some future date (minus the ones who die in paragliding accidents).

  • Brandybuck||

    So maybe they can buy a policy when they are young, and keep it for when they get old. Tying your insurance to your employer was a bad mistake, but the solution is not to force the young to subsidize the elderly by mandating they purchase inflated insurance plans.

    How about we just decouple insurance from employment? Problem solved! While still intrusive, it would be several magnitudes less intrusive than corporatist Obamacare. As for the poor who can't afford insurance, give them health insurance vouchers. Other half of the problem solved at a fraction of the cost of Obamacare.

  • ant1sthenes||

    Well, that would definitely screw people that had conditions that were grandfathered in. You'd need some sort of pre-existing condition amnesty.

  • Registration At Last!||

    Brandybuck, you are welcome to make as many attempts to get that scheme past the Tea-Party GOP as you want. Godspeed and good luck.

  • Auric Demonocles||

    But vouchers allow people to choose how to spend them. They might choose wrong!

  • Mr. FIFY||

    That apartment analogy is bullshit, RAL. If you were intellectually honest, you'd cop to that fact.

  • Auric Demonocles||

    It's not having indoor heating. It's that the gas company has to charge you the same regardless of your actual gas usage. So in your hypothetical it would screw snowbirds or summer sublets.

  • Registration At Last!||

    But everybody is a snowbird when they are young and not a snowbird when they are elderly.

    So we could charge you a lower price when you are young and then a higher price when you are old, or we could just charge you a middle price the whole time. What's the difference in the end?

  • Auric Demonocles||

    I take it you think I should have lower car insurance premiums because it's unfair of the companies to charge me more for being a young male? It will all average out when I'm old anyway, right?

    To address your "what's the difference":

    I could die next year, and thus paid higher premiums now for no reason.

    Obamacare will never last until I'm old.

    I will never be a woman.

    If you can't charge me less based on doing healthy things, I am now less inclined to do health things.

    I may not want to have health insurance at all, or only for a portion of the time, so charging me the average is stupid.

    You're fucking over the ones with the least money to subsidize the ones with the most.

    Most importantly, you don't have the right to tell me what I have to pay for things.

  • Registration At Last!||

    Could you be any more random?

    Even your random facts are wrong. Obamacare lets insurers charge the old more than the young and charge smokers more than non-smokers.

    The government tells you how much to pay for any number of things, including milk.

    The possibility of you dying next year is an irreducible contingency, utterly irrelevant to rational purchasing choices. You could die tomorrow, which would make your purchase of green bananas today sub-optimal. That is irrelevant to public policy.

  • Dano||

    The government tells you how much to pay for any number of things, including milk.

    According to that logic if the government told you to jump off a bridge, you'd do it.

  • Mr. FIFY||

    Hey, RAL... should the blind and quadriplegics be forced to buy car insurance? Because, like, it's not faaaaair that they don't contribute to the auto-risk pool.

    Stupid cunt.

  • ||

    Statistically, you're much wealthier when you're older. Also, now that the young will have health insurance, they're going to use healthcare more than they otherwise would have (i.e. raising demand--raising prices).

  • Registration At Last!||

    If using health care means getting decent and regular preventative care, it will actually conserve resources.

  • Greg F||

    If using health care means getting decent and regular preventative care, it will actually conserve resources.

    Another unquestioning believer in the preventive care savings myth. What a sad pathetic country of fools we have become.

  • GatorHeel||

    My employer-sponsored health insurer pays extensively for preventive care, in particular for my infant child (to the point that there is zero copay for "well child" appointments). They do this even though I could switch providers next year, and they almost certainly will not be her insurer for life. Are they acting irrationally?

  • GatorHeel||

    My employer-sponsored health insurer pays extensively for preventive care, in particular for my infant child (to the point that there is zero copay for "well child" appointments). They do this even though I could switch providers next year, and they almost certainly will not be her insurer for life. Are they acting irrationally?

  • KWebb||

    So we could charge you a lower price when you are young and then a higher price when you are old, or we could just charge you a middle price the whole time. What's the difference in the end?

    There is an awful lot of uncertainty about the rate of increase in what the insurer will have to payout in benefits. Over 30 or 40 years even being off a few basis points can add up to disaster. If the insurer underestimates the how fast payouts increase, the company goes under and the customer is stuck paying the old geezer rate at the next company. If the insurer overestimates, the customer overpays.

    The closest thing an insurer could come to offering a levelized premium on a health policy would be to allow the customer to overpay their premium and build up a balance on the policy that can be drawn down later in life. That is something you can already do on your own with the investment of your choice.

  • ||

    Go troll yourself, trolly trollerson!

  • Paul.||

    Wow, what a tortured analogy.

    Actually, it's like saying that apartnent complexes in Nome, Alaska have to pay for airconditioning and heating.

  • Registration At Last!||

    Nope. Nome doesn't have heat waves, but everybody gets old.

  • Atlassheepdog||

    That has to be the worst analogy in the history of comments. "alive in the summertime"? What the hell does that even mean. Furthermore with heating or cooling I can decide if I want to turn it on or off. No zoning I'm aware of "requires" heating or cooling, its installed because the market demands it or no one would rent there. It's a concept you obviously don't understand. Phenomenally flawed logic ; just like Obama.

  • Registration At Last!||

    You.
    Are.
    Wrong.
    About.
    Everything.

  • ||

    Yes, so all you old farts stop whining, we're the ones getting it good and hard.

  • Auric Demonocles||

    I'm shocked (shocked!), that making everyone pay the same rate screws over some people. In this case, why isn't everyone else paying as little as I am, as a healthy 23 year old male? I mean, I don't pay more for my car insurance than a 50 year old woman does.

  • Cliché Bandit||

    So, I am starting a young community in my area. Please apply for a residence. You must be under 25, female, and completely healthy (not John fantasies healthy but medically healthy)

  • Paul.||

    You must be under 25, female

    What about Shemales? You're othering people now.

  • Auric Demonocles||

    Wouldn't an all male, under 25, completely healthy community get an even cheaper rating?

    Not that I'd think the discount was worth it.

  • Lord at War||

    Auric-

    No.

    With no wimmens around, it invariably comes down to guys saying "Watch this! (hold my beer.)

  • Paul.||

    How Obamacare, Like Medicare, Royally Screws Young People

    Or, How a Complete Evisceration of Constitutional Limits of Federal Power Screws Everyone.

  • Killazontherun||

    Remember kids, you don't go into the voting booth for the Free Shit Fairy you want, you go in their with the one you have.

  • JW||

    Obamacare forces insurers to charge their eldest beneficiaries no more than 3 times what they charge their youngest ones: a policy known as “community rating.” This, despite the fact that these older beneficiaries typically have six times the health expenditures that younger people face. The net effect of this “community rating” provision is the redistribution of insurance costs from the old to the young.

    I'm starting to think of this as sweet, sweet revenge upon the Hope and Changers.

    When I get old(er), I'm going to bleed you collectivist bitches dry.

  • RBS||

    When they ask you why you accept the benefits when you don't agree with them you can finally say "because fuck you, that's why."

  • Brutus||

    I think this is the perfect way to celebrate, by rubbing their noses in it. Maybe take some pics out on the fairway, raising a beer in toast to the round you're able to afford because they're being forced to subsidize your health insurance.

  • RefornedRep||

    Your entire premise is faulty here. Exchanges will have special policies for 18-29 yr olds not on their parents plans that are more cayastrophic based.

    If this is the best argument you now have against this Constitutional law it is pretty lame.

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