August 26 2013

New ObamaCare Mantra: Young People Will Benefit in the Long Run

Charlotte Hays

ObamaCare supporters have grown increasingly alarmed that young people will act in their own self-interest and not buy expensive, government-approved health insurance policies.

If young people don’t bite, ObamaCare hasn’t the slightest chance of being solvent. So the new mantra is that youths will benefit in the long run by acting against their interests in the short run.

Pro-Obama blogger Ezra Klein writes:

Young people grow old. Healthy people get sick. Rich people become poor. The people overpaying to keep costs low today are the people underpaying 10 or 20 years from now.

Yeah, that’s definitely the kind of argument that would have worked on me when I was 22!

Forbes contributor Chris Conover debunks the wistful thinking of ObamaCare supporters on this:

As a health policy skeptic, I know that lots of intuitive ideas—such as that prevention saves money—turn out to be false upon closer examination. So when I did some actual analysis of this latest idea, it did not surprise me to learn that this claim is dead wrong

Once the time value of money is taken into account, the average young person will be worse off under Obamacare even if they live long enough to be a near-elderly person who pays premiums that are well below actuarially fair rates.

Conover quotes the statistics from a recent study from the National Center for Public Policy Research. It’s pretty persuasive:

  • About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty.
  • More than 3 million will be $1,000 better off if they go the same route.

But these are short-term drawbacks. Conover finds that the long-term picture isn’t any brighter. People will not make out better with regard to healthcare costs over a lifetime by assuming a disproportionate burden when young.

Conover also notes the novelty of the decision to stick it to young people that is embodied in ObamaCare:

Imagine a state that tried to impose a sales tax in this fashion, where everyone would have to show an ID card and the amount of tax charged to 18 year olds would be 18% while those age 30 would only have to pay 5% and seniors would get a rebate!)[5]  How kooky is that?  If we as a society have decided that some group needs help in paying for their health insurance, shouldn’t we make those subsidies visible for all to see instead of burying them in someone’s health insurance bill? Moreover, shouldn’t we be relying on taxes that are visible and fairly distributed rather than using “taxation by regulation” of health insurance? If older people need subsidies, why should young people (who are far from being the wealthiest in society) be disproportionately burdened with bankrolling what should be a social responsibility?

This also highlights one of my favorite things about the gifts liberals give society. Remember how the late Senator Ted Kennedy was praised for all his work in the field of health care? But he wasn’t writing checks—he was forcing somebody else to do that part of helping society.

When liberal legislators “give” something they don’t really give—they just order somebody else to pay. I rather suspect that this time they are going to have a hard time getting kids to pay up and make good on their promises.

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