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Obamacare Kicks Young Men While They're Down

obamacare

Young men will be the biggest losers in the transition to Obamacare, according to a new report by the actuarial and consulting firm Milliman. The report estimates that males as a whole will see an 11 percent increase in insurance premiums, while females as a whole will see a nine percent decrease. Men under 40 will face insurance hikes of 18 to 31 percent; females under 40 will benefit from 13 to 19 percent decreases.

But here’s the real kicker: premiums for young men ages 25-36 could increase by more than 50 percent, and females 25-29 will face a 4 percent increase. In other words, if you’re young, you lose. If you’re a man, you lose. If you’re a young man, you really lose.

Recent news about Obamacare premium costs has tended to focus on whether the premiums will go up or down on average. What this data shows is that these broader national or state averages hide scarier changes in the group-by-group breakdowns. Young people are already the hardest hit by the recession and by the plethora of other entitlement programs that subsidize the boomers. Young men, in particular, are especially hurt by some of the country’s current economic shifts. Passing a law that forces them to shoulder an even greater economic burden and then spending tons of money to convince them to sign up for this raw deal is both cruel and irresponsible.

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  • wigwag

    What is it about the concept of pooled risk that Professor Mead can’t seem to get his head around?

    Yes its true that young people are less likely to get sick than old people; but the good news is that they are also overwhelmingly likely to get old themselves which means that being in a risk pool will benefit them in the long run as much as anyone else.

    It seems that Professor Mead has finely tuned his “war on the young argument” to an even more peculiar argument, a war on young men.

    I have some questions for the good professor. Black men have about a twenty percent elevated risk of prostate cancer over white men. Is it a war on white men to charge them the same health insurance premiums as black men without taking the extra cost of treating prostate cancer into account? What about sickle cell anemia; black children have a hundred fold (or more) increased risk of contracting this disease that white children do. Is charging the same premiums for white children and black children a war on white children?
    What about lupus; 90 percent of the people who get lupus are women; men get the disease, but rarely. Women of African American descent or 3 times more likely to contract lupus than white women. The costs of treating diseases such as lupus, along with the diseases complications are extremely high. By charging white men the same for their health insurance as black women, is the government encouraging a war on white men?
    What about multiple sclerosis; women are far more likely to get this autoimmune disease than men, but white women get MS far less often than black women. By charging black women the same in insurance premiums as white women, is the government perpetrating a war on white women?
    Come to think of it, there’s really no reason to limit the discussion to insurance premiums; in most towns a very substantial portion of real estate taxes go to cover educational expenses; why should a older people who no longer have children attending school and perhaps never did, pay the same real estate tax rate as a young family with children; doesn’t this represent a war against old people perpetrated by young people?
    Of course, it’s not just schools; many towns spend quite alot of money keeping up parks and recreational facilities; visit them and you find lovely baseball fields, picnic tables, manicured lawns, etc. I can’t comment on what it’s like where Professor Mead lives, but where I live, its mostly children, teenagers and young adults playing baseball, football and soccer on those fields; I rarely see teams from one nursing home competing with teams from another. Isn’t it a war on the old for their taxes to be spent subsidizing the costs of maintaining these recreational facilities.
    Professor Mead’s argument may sound appealing, but it’s superficial. When a young person without health insurance checks into a hospital after a car accident, a childhood cancer or with some other malady, guess who gets stuck paying the bill. Mostly it’s the insured and until now those insured people have been disproportionately older. It’s just another case of the war on the old that Professor Mead seems to think they had coming.

    • charlesrwilliams

      It is one thing to pool risk and it is another to make person x pay for the risks associated with person y. There is a profound difference and this is an issue because health care costs are largely driven by lifestyle choices and attitudes about using medical services. Something must be done to help people with expensive chronic medical conditions but community rating and mandating lavish comprehensive benefit packages is not the answer.

    • Curt Wilson

      So of course you find the idea of charging young men far more for auto insurance completely repugnant, and something that the federal government must step in and forbid…

      • wigwag

        Curt, you raise a fair point, but you are mistaken if you think that the cross-subsidies based on age that characterize Obamacare are absent from automobile insurance.

        Here’s a sample of the data for young males; men aged 16 to 19 are more than 5 times as likely to file an insurance claim for an accident than men 30 to 59; yet they pay automobile insurance premiums that average only 2-3 times what men 30-59 pay. Why do insurance companies charge the youngest drivers less on a per-accident basis than older drivers? There are several reasons; (1) they can maintain profit levels by having holder drivers cross-subsidize younger drivers, (2) if they charged younger drivers more than they do, they would be effectively banning these drivers from the insurance market because of cost and (3) many of these younger drivers are put on their parents policy and their parents (who are good customers) might be angry if their child couldn’t obtain coverage.

        Just as older drivers subsidize younger drivers, in Obamacare, younger patients subsidize older patients. Obamacare doesn’t provided for total community rating, it provides for partial community rating so young patients do pay less in premiums than older patients but similar to the situation with automobile insurance even at the lower rate they still in a sense provide a subsidy.

        The feature that makes Obamacare and automobile insurance different is the fact that automobile insurance is optional; a young person can decide to avoid paying by agreeing not to drive a car. There is no way to escape paying a health insurance premium (or a small fine) under the new health insurance law.

        But there is a fundamental difference between health insurance and automobile insurance. By eschewing the privilege of driving, a young person can be certain that they will never cause an accident but by eschewing health insurance they cannot assure that they will never get sick or injured.

        • retrophoebia

          Wigwag:

          1) There are many more factors at play here than you mention. In the auto example, for instance, you don’t note that the premium differential may be due to the fact that younger people tend to drive cheaper cars than more established folks. Markets have something much closer to perfect knowledge than gov’t does, and for gov’t to pretend otherwise is economic folly.

          2) You present excellent arguments for deregulating and allowing young people to buy cheap nationally-transferrable catastrophic coverage, not for gov’t cross-subsidization.

          3) “Yes its true that young people are less likely to get sick than old people; but the good news is that they are also overwhelmingly likely to get old themselves which means that being in a risk pool will benefit them in the long run as much as anyone else.”

          Nope. You’re presenting a variant on the argument for social security. Let me know how that turns out. *cough ponzi*

          4) “What is it about the concept of pooled risk that Professor Mead can’t seem to get his head around?”

          The reason insurance works is not because of “pooled risk.” The reason insurance works is the expected value of something bad happening to one person versus a group. Insurance actuaries slice those probabilities very finely and charge premiums to make money. When you remove their ability to arbitrage risk for a certain thing in a certain pool of people and charge premiums accordingly (e.g. “pooled risk”) then insurance becomes pointless. Your lupus example is a perfect. Ideally, companies charge different premiums to men and women based on their risk. Otherwise, “insurance” simply becomes an income transfer, and the answer to your question would be “yes.” Hence WRM’s post.

    • Advisor_37years

      no, no, no. Insurance is based on the law of large numbers – Obamacare is not insurance; it is prepaid medical. Young men are going to look at their own health and buy insurance based on their likelihood of “bad things happening” A 30 year old can buy a catastrophic coverage for $200 a month ($5000 deductible) in CA. (Very expensive state) This is affordable-under Obamacare, coverage will be much broader but cost $400 a month. This is unaffordable and young men won’t buy thus rendering the whole “disparate impact” argument moot.

  • Anthony

    WigWag’s position macro-economically speaking is sound but report specifically deals with ACA and its impact on market premiums in 2014; fundamentally, report reveals how some provisions will increase premiums and others will make coverage more affordable for some consumers (pooled risked). The report highlights broad range of changes tied to ACA and impact on young is one of many cited (though rate changes for young males increase significantly). Bottom line, under ACA premiums go up for both sexes with variation in age group demographics.
    “The impact on specific individuals will vary significantly depending on their age, gender, location, health status, income level, and coverage they have today.”

  • charlesrwilliams

    Not to worry, young men can pay a minuscule fine and sign up for insurance while they are waiting for the ambulance to arrive.

  • wigwag

    Angelina Jolie had both of her breasts removed last month; she told the story of her double mastectomy in an op-ed in today’s (Tuesday’s) New York Times. Although she didn’t have breast cancer, she made the incredibly painful decision to have her mastectomy because she was born with a particular genetic mutation which raised her chance to eventually contracting breast cancer to more than 80 percent.

    She inherited an unfortunate version of a gene called BRCA-1 that greatly enhances the risk of contracting breast cancer. A mutation to a related gene called BRCA-2 also significantly increases the risk of breast (and ovarian) cancer. The tests for these mutations are now routine and widely available.

    Women who don’t have undesirable mutations to either gene have a twelve percent chance of developing breast cancer; having the mutated gene increases risk five-fold. About ten percent of all breast cancer in the United States is associated with these mutations.

    As it happens, Jewish women of Eastern European descent are more than four times more likely to have a mutatation to one of these genes than the rest of the female population in America.

    Does Professor Mead believe that if Jewish women and non-Jewish women pay the same health insurance premium that somehow this represents a war on Christian people; the logic of this post makes that supposition reasonable.

    Or perhaps Professor Mead thinks that all women should routinely be tested for these mutations and their insurance premiums should be adjusted accordingly. After all, we couldn’t accept a war on women unlikely to get breast cancer just to benefit those likely to get it; could we?

    • Jim Luebke

      I wonder if wigag has ever defended “disparate impact” reasoning?

  • Jim Luebke

    Honestly, it’s what men are made for. We work. We’re providers.

    It’s one thing if these men were getting the respect that came from being a Breadwinner, Father, Husband. For those of us who are getting that respect still, life isn’t bad.

    For men without those prospects to look forward to, though, who are going to get fleeced (flayed!) for the sake of people who have no personal ties to them, who will never give them any credit or respect… this system is not worth supporting. For them, and for those of us who have sons who will inherit this country, this system is worth opposing.

    More than that, men have a tendency to become destructive of the system (and themselves) when that system doesn’t work for them. This explains gangs and ghettos. Helping “Julia” is just treating the symptoms, a counterproductive treatment at that — prescribing ever more morphine for a shotgun wound. While more and more people join in the firefight.

    This is not a stable situation. Unless the Democrats are stopped, the same thing that their programs did to destroy black America is going to happen to everyone.

  • graywolf

    What goes around comes around.
    85% of this demo. voted for Obama TWICE.
    I don’t feel sorry for these nitwits.

    • chicagorefugee

      85%? Try 60%. And let’s not tarnish them all with the same brush. Obama actually LOST with white voters <30. And more women voted for President Free Birth Control than men ….

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