During the entire ObamaCare debate, young voters consistently provided the most support for the government overhaul of the health-care system. Groups that encourage the youth vote campaigned in support of it, including the “F*** the Vote” campaign by Rock the Vote that had supporters pledging to only have sex with other Obama acolytes. Now that ObamaCare’s passed, the Associated Press finally explains to them a simple truth about federal mandates and the cost structure of insurance risk pools:
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.
I explained this in my response to the “F*** the Vote” campaign:
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.
But there is more than just this mechanism driving costs up for younger people. The new law restricts the ability of insurers to charge higher-risk pool members more in premiums. This helps keep prices lower for middle-aged and senior customers by transferring the costs to younger, healthier clients:
At issue is the insurance industry’s practice of charging more for older customers, who are the costliest to insure. The new law restricts how much insurers can raise premium costs based on age alone.
Insurers typically charge six or seven times as much to older customers as to younger ones in states with no restrictions. The new law limits the ratio to 3-to-1, meaning a 50-year-old could be charged only three times as much as a 20-year-old.
The rest will be shouldered by young people in the form of higher premiums.
This is what happens with “community pricing.” Costs don’t disappear; they just get allocated in a different manner. Instead of the actual higher-cost clients paying their share of the burden, they now get subsidized by low-risk clients instead. Thanks to Congress, these low-risk clients no longer have the option of choosing high-deductible catastrophic insurance with HSAs for routine medical work, but have to buy comprehensive insurance plans that wind up subsidizing their parents and grandparents.
Or, to put it in simpler terms, they’re getting f***ed by the same people who pushed the “F*** the Vote” campaign and the Democrats. Had the younger voters taken the time to learn something about risk pools, insurance, and the experience of Massachusetts and Maine using the same kind of mandates, they’d have told Rock the Vote to f*** off. They still have the opportunity to deliver that message to Democrats in November.