Wednesday, November 25, 2009

Sticking It To The Young People

The November 23, 2009 Washington Post carries a column by Robert Samuelson explaining why the AARP (the major lobbying group for Americans over 50) are so in favor of health care "reform" -- because it allows them to stick young people with the bill.

Here is an excerpt from "Health 'reform' that burdens our young":
...Now comes the House-passed health-care "reform" bill that, amazingly, would extract more subsidies from the young. It mandates that health insurance premiums for older Americans be no more than twice the level of that for younger Americans. That's much less than the actual health spending gap between young and old. Spending for those age 60 to 64 is four to five times greater than those 18 to 24. So, the young would overpay for insurance that -- under the House bill -- people must buy: Twenty- and thirtysomethings would subsidize premiums for fifty-and sixtysomethings.

...Not surprisingly, the 40-million-member AARP, the major lobby for Americans over 50, was a big force behind this provision. AARP's cynicism is breathtaking. On one hand, it sponsors a high-minded campaign called "Divided We Fail" and runs sentimental TV ads featuring children pleading for a better tomorrow. "Join us in championing your future and the future of every generation," ended one ad.

...AARP justifies the cost-shifting as preventing age discrimination. Premiums based on age should be no more acceptable than premiums based on medical expenses reflecting race, gender or preexisting health conditions, it says. The House legislation bans those, so it should also ban age-based rates. AARP dislikes even the 2-to-1 limit. It thinks premiums for someone 22 and someone 62 should be identical. (In insurance jargon, that would be full "community rating.")

This is unconvincing. All insurance aims to protect against risk -- but within groups facing similar risks. Put differently, most insurance is risk-adjusted. Auto insurance premiums vary by age; younger drivers pay higher rates because they have more accidents. Homeowners' policies for similar houses cost more in high-crime areas. This is not "discrimination"; it's a reflection of risk and cost differences. Insurers that ignored these differences would soon vanish because they'd suffer heavy losses and lose customers.
(Read the full text of "Health 'reform' that burdens our young".)

Young, healthy adults will be the most unjustly affected by this proposed legislation. These patients consume the fewest medical resources and therefore most heavily subsidize the costs of the older, more-frequently-ill patients.

ObamaCare would rob them of money they could use for their own goals, such as saving to buy a first house or to start a business or a family. In essence, it would force them to sacrifice their lives and futures for the sake of the collective.

(For more on the fallacy behind the "anti-discrimination" argument, see "In defense of health insurance discrimination" by Don Watkins of the Ayn Rand Center.)