Monday, September 28, 2009

Health 'Reform' Is Income Redistribution

The September 29, 2009 Wall Street Journal carries an OpEd by Michael Leavitt, Al Hubbard and Keith Hennessey which observes that "Health 'Reform' Is Income Redistribution".

Here's an excerpt:
...President Obama proposes to require insurers to sell policies to everyone no matter what their health status. By itself this requirement, called "guaranteed issue," would just mean that insurers would charge predictably sick people the extremely high insurance premiums that reflect their future expected costs. But if Congress adds another requirement, called "community rating," insurers' ability to charge higher premiums for higher risks will be sharply limited.

Thus a healthy 25-year-old and a 55-year-old with cancer would pay nearly the same premium for a health policy. Mr. Obama and his allies emphasize the benefits for the 55-year old. But the 25-year-old, who may also have a lower income, would pay significantly more than needed to cover his expected costs.

...But the combination of a guaranteed issue, community rating and an individual mandate means that younger, healthier, lower-income earners would be forced to subsidize older, sicker, higher-income earners. And because these subsidies are buried within health-insurance premiums, the massive income redistribution is hidden from public view and not debated.
(Read the full text of "Health 'Reform' Is Income Redistribution".)

Basically, the Obama-Baucus system of mandatory insurance forces the young and healthy to subsidize the old and ill, using the nominally private insurance system to conceal the fact that it's a new welfare program.