Almost three years after the passage of ObamaCare, BuzzFeed’s Ben Smith reports that ObamaCare is actually a wealth-redistribution system in the most regressive manner possible. Young workers, who find it increasingly more difficult to find jobs, will end up subsidizing the health care of older workers, who are hanging onto jobs longer and longer. The politics of this wealth transfer is nothing short of perverse, politically speaking:
But the next 12 months are likely to reveal the opposite. Imminent elements of Obama’s grandest policy move, the health-care overhaul known as ObamaCare, are calculated to screw his most passionate supporters and to transfer wealth to his worst enemies.
The passionate supporters are the youth, who voted for him by a margin of 60% to 36%, according to exit poll samples of people 29 and under. His enemies are the elderly: Mitt Romney won 56% of the votes from people 65 and over. And while one of ObamaCare’s earliest provisions was a boon to the young, allowing them to stay on their parents’ insurance through the age of 26, what follows may come as an unpleasant surprise to many of the president’s supporters. The provisions required to make any kind of health insurance plan work — not just ObamaCare, but really any plan of its sort — require healthy young people to pay more in health insurance than they consume in services, while the elderly (saved by Sarah “Death Panels” Palin from any serious attempt to ration expensive and often futile end-of-life care) consume far more than they pay in. There is always a push and pull, however, and this year will be spent laying plans to shift the burden further toward the young. …
But politics is about power and resources, not about policy and morality. AARP has no real case to make there. The current young supported Obama; and the current old opposed him.
The near-total silence on this issue is a mark of a class that is either utterly selfless (hard to believe, honestly) or, as usual, singularly bad at seeing and defending its interests.
Hey, you know who predicted this in 2010? Me, and just about everyone else who could do math. In fact, just days after the bill’s passage, the Associated Press reported on the expected premium hike for younger policyholders:
Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans — a shift expected to raise insurance premiums for young people when the plan takes full effect.
Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press. The analysis did not factor in tax credits to help offset the increase.
The higher costs will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years.
Thanks to ObamaCare’s mandates for comprehensive insurance, younger and healthier workers have no choice but to subsidize the premiums of older and sicker workers through their premiums. In fact, I explained this before the passage of the ACA, in December 2009 when “Rock the Vote” proposed to get young people to withhold sex from anyone opposed to ObamaCare, apparently so that they could get screwed in both senses of the word:
First, the young people to whom they’re preaching largely avoid buying health insurance, and for good reason. They don’t need to spend $3600 per year (Minnesota’s average in 2007) to cover a couple of doctor visits every year. They’re better off buying catastrophic health insurance, rather than the mandated comprehensive coverage under ObamaCare, and use HSAs to pay for their health care with tax-free cash. That’s what Keith Olbermann does, after all, and he’s a lot older than the RtV target audience.
Who benefits from this push? The young adults don’t; they’re going to pay a lot more than they receive. Insurance companies will benefit by forcing them into the system, reducing the risk and spreading the costs over a wider base. I don’t consider insurance companies evil, but many of the ObamaCare advocates do — and yet they’re pushing their followers to subsidize slight declines in health insurance premiums for the older generations in America. It’s just like Social Security, only with a worse payoff in the end.
And in September 2009, I wrote a column for the now-defunct AIP explaining that the combination of HSAs, far-cheaper hospitalization insurance, and retail clinics would not only save younger and healthier people a boatload of money, it would also bend the overall cost curve downward by restoring pricing signals to the consumer rather than third-party payers. That would put more of the actual cost of health care on those who utilize it. I’m no special genius — but I can do math and know that most young people under 35 didn’t spend anywhere near enough to justify $3600 a year in comprehensive-insurance premiums, and won’t under ObamaCare, either, especially as premiums skyrocket. Where does the rest of the money go in a risk pool? It subsidizes those who do utilize providers more, the older and sicker.
Why didn’t Ben (who, by the way, is a nice guy and fun to work with otherwise) do the math himself three or more years ago? Er …
The voices raised against age rating and other policies tend not to be the most credible. They are, first, conservatives who simply see this as another wedge against Obama and his new policy. Outlandish rhetoric about the health-care law’s threat to American freedom can make it hard for members of either party to consider policy on the merits; and so the proposal from Georgia Rep. Phil Gingrey (in the news of late for theorizing that ” tense and uptight” women, like, say, rape victims, are less likely to conceive children) to leave age discount decisions with the states is generally considered as gimmicky as its name: The Liberty Act. (It’s short for “Letting Insurance Benefit Everyone Regardless of Their Youth.”)
So no one did math because we conservatives didn’t like Obama and didn’t trust him? Maybe that’s because we actually did the math when it counted. If more younger voters did the math in 2009, 2010, and especially 2012, perhaps they wouldn’t be on the hook for subsidies for older, wealthier Americans.
I’d say this gets the Eric “Otter” Stratton Award (NSFW):
Update: Reason’s Nick Gillespie points out some other ways in which Obama is sticking it to the younger generation:
As my colleague Matt Welch pointed out yesterday, SOTUs are equal parts WTF and completely forgettable, so it’ll all be over soon except for the ardent declarations that we can make lifesaving machines more quickly in a zero-gravity environment.
But if proprietor of the most open and transparent and clean-smelling administration of all time wants to make some real news, he might speak honestly to the segment of the American electorate that he is screwing over six ways to Sunday: Young voters between the ages of 18 and 29. Listen up, kids! Your parents are robbing your futures blind and you’re chumps enough not only to go along but to ask – like the adorable title orphan in the classic baby boomer musical Oliver! – please, sir, I want some more.
From virtually every possible angle, Obama is helping to diminish the prospects for today’s younger generation. First and foremost, his response to the Great Recession – stimulus and the massive piling up of debt – is slowing the recovery. Massive regulatory schemes such as Dodd-Frank and the creation of huge new soul-and-bucks-sucking programs such as Obamacare weigh heavily on the economy now and in the future too. His refusal to discuss seriously old-age entitlement reform – Medicare and Social Security and the 60 percent of Medicare that goes to old folks – is massive storm front on the economic horizon. His preference for secrecy and overreach when it comes to executive power won’t screw young people as obviously as his economic policies, but when he leaves office in 2017, he will have created far more terrorists than he needed to.
Be sure to read it all.