Penalizing Youth

Community rating is another generational rip-off.


After nearly two years of heated debate over health care, one major possible change is still almost universally praised: community rating. Under community rating, everyone in a defined community must be offered health insurance at the same premium.

This would trigger a massive transfer of wealth from the young to the old. Younger and healthier people who buy health insurance would be forced to pay artificially high rates to subsidize the health care of older and sicker people.

David Bradford and Derrick Max of the American Enterprise Institute estimate that people between the ages of 25 to 29 would see their premiums go up by an average of $651 a year, while people aged 60 to 64 would be subsidized $2,000 a year under the Clinton plan. (Medicare would continue to cover Americans 65 and over.) The same pattern holds true under other variations of health-care reform.

Because young Americans make less and own fewer assets than older Americans, community rating would perversely redistribute wealth from the have-nots to the haves.