Thursday, March 14, 2013

Affordable Care Act's wealth tranfer from the young to the old

Other price hikes will vary due to factors like a person's current coverage and age. Young people who currently have low-cost coverage may see some of the biggest hikes.
In many states, insurers charge a 60-year-old customer $5 in premiums for every $1 they collect from a 24-year-old. The logic behind that is that older people use health care more and generate more expensive claims than younger customers, so insurers need to collect more to help pay their bills.

But the overhaul will narrow that ratio to 3-to-1. That alone could cause the premium for a 24-year-old who pays $1,200 annually to jump to $1,800, according to AHIP. Meanwhile, the 60-year-old who currently pays $6,000 will see a 10 percent drop in price

Walther Russell Mead pointed this out repeatedly,


I opposed the law when it was passed on the grounds that it represented another rip off of the country's young people to lower costs for the Boomers and the middle aged. Young men (increasingly the most vulnerable people in a society that cares little or nothing about most of their issues) especially are going to be forced to pay too much for insurance they don't need. It is their artificially inflated premiums that will provide the money that lets the social engineers of Obamacare play their complex games with the health care system.
Supporters of the program rise to argue that when the young men grow older they will need more care and then they will benefit from cheaper premiums as they in turn are subsidized by the next wave of suckers, excuse me, young people. But Obamacare isn't fiscally balanced or sustainable; its true costs were disguised by accounting tricks like postponing some of its impacts while collecting its revenues so that the first ten years of the program looked good on Congressional Budget Office scoring sheets.

Good luck with the pay back from the next wave.  Argument's going to be too much cost incurred at end-of-life, it's unnecessary, and you're  not going to get it.  Paul Krugman's death panel calling shots.

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