The American Interest
Analysis by Walter Russell Mead & Staff
NYT Pins Obamacare Hopes on Robbing the Young

obamacare

The NYT published a news piece today on the Affordable Care Act that accuses Republicans of “preparing to exploit every problem that arises” with Obamacare in the next midterm elections. The most telling part of the piece comes at the end. After heaping scorn on Republican opportunism, the author delves into what Obama will need to do to make the ACA work:

The stakes for the president are high. The ultimate success of the law, and in turn his domestic legacy, depends on how well the insurance marketplaces operate, and whether enough young Americans enroll for coverage [...]

He will especially urge healthy young adults, those up to 35 years old, and minorities — groups in which he has “a lot of cachet,” Mr. Pfeiffer said — to sign up starting Oct. 1 for the new exchanges. Beginning Jan. 1, most Americans must have insurance or pay fines.

Without the participation of that generally healthy young population, insurance premiums for everyone else would increase—threatening support for a law already short of it.

In short, the success of the ACA wholly depends on President Obama’s ability to persuade young people to voluntarily subsidize the old. If young people don’t agree to sign up for expensive plans full of benefits many of them don’t need, the oldsters won’t be able to afford the high cost of their plans.

This is exactly why we’ve been worried about the ACA from the beginning: It is founded on a huge generational transfer from young to middle-aged. This is an especially bad deal for younger generations, not least because the rapidly growing costs of health care (which the ACA doesn’t do enough to control) pretty much guarantee that they won’t be able to have the same kind of benefits as today’s middle aged by the time they reach their 50s.

The Democratic plan to make Obamacare work apparently boils down to a hope that the President can successfully abuse the trust that young people have placed in him by convincing them sign them up in large numbers for a bad deal.

Published on May 7, 2013 2:00 pm
  • Stacy Garvey

    If I were a young person and without insurance there’s no way I’d enroll. With guaranteed issue, why bother until you become ill or are injured? You’re indemnified for a catastrophic event and probably don’t need all the preventative care. It’s doomed.

    • BrianFrankie

      I think I’m going to help the Affordable Care Act along the path to doomnation.
      As highlighted in this Via Meadia posting, it should be easy – just enlist young healthy people who spend more on premiums than they receive in claims to quit their existing health insurance and refuse to pay the ObamaCare penalty/tax. A good, sharp dose of refusal-to-pay-civil disobedience should send the Affordable Care Act, and the business model of the crony insurers who went along with it, straight over the cliff. Then we can set about building a real health care system – a working, cash based marketplace for routine stuff, with catastrophic insurance to help those less well off.
      Anyone want to help?

  • http://www.facebook.com/sphilben Scott Philben

    I would like lower car insurance. Can you get the government to force some people who don’t have cars to buy insurance so I can crash into things and not have it cost so much?

    Thanks.

  • kahudson

    This initiative is partially undercut by families’ abilities to keep persons on their insurance as dependents until 26. However, broadly, this is par for the course. Social Security and Medicare are funded largely by an intergenerational transfer of funds from the poorer young to the relatively wealthier old.

  • Fat_Man

    The Wall Street Journal ran the same sort of nonsense under Zeke Emanuel’s by-line.

    http://online.wsj.com/article/SB10001424127887324326504578467560106322692.html

    The party line is that they hope the Young Invincibles are really the Young Imbeciles who will sign up for an overpriced* product that they don’t need** to float a public policy that few Americans want or support.

    Good luck with that. The kids are broke because they are carrying education debts that they will never be able to repay and because they are unemployed or underemployed in large part because of Obamacare. So they don’t have the money to throw into the pot.

    Of course the fact that the Youth voted so heavily for Obama is a sad clue that they may be right about the savvy of the younger generation or their lack thereof. But, I think that being broke trumps being stupid.

    On the other hand, the idea that Obama should spend his time selling health insurance to people who neither need it nor can afford it, has a lot of merit. Obama has failed as the Chief Executive of the Country, and as its Commander in Chief. Sending him out on the road as a pitchman will keep him out of Washington and out of trouble. Further everybody knows that Insurance Agents have to play a lot of golf. Maybe he could add fire, life, and auto, and open a full service agency.

    *Obamacare requires insurance companies to charge their older customers no more than 3 times what they charge young adults. Since the older group makes claims 5 times as often, the companies set their prices based on those customers and charge younger customers 167% more than their claims would justify.

    **Another feature of Obamacare is that insurance companies can no longer exclude claims based on health conditions that exist at the time the policy is purchased. Wait until you are diagnosed with cancer before buying health insurance. You can buy a policy on a burning building.

  • http://twitter.com/ExactlyBackward Nick Bidler

    I’m 26, B.A. in History, living with my parents and unemployed. On one hand, I’m ashamed and poor. On the other hand, shenanigans like this and social security take the edge off my shame.

  • Jim Luebke

    So do Democrats still try to maintain the narrative that those who support the GOP do so against their economic self-interest?

  • http://twitter.com/RichardBlank Richard Blank

    OBAMACARE will increase outsourcing in Central America.
    Enacted in July 2010, The U.S. healthcare reform (“Obama Care” or the “Patient
    Protection and Affordable Care Act”) is intended to pressure large and small
    employers through force and taxation. The end result will show North American
    companies deciding to send customer support, sales, lead generation and
    appointment setting jobs offshore to stay competitive or risk going out of
    business. Many business owners will hire a dedicated bilingual employee nearshore
    who is 100% committed to their project. ESL call center employees in Costa Rica
    are just as or more effective than transitional in-house staff for half of the
    cost. Finally, giving small to medium sized companies the freedom to scale up
    their BPO staff without getting caught in the Obamacare challenge in 2014.

    http://www.obamacareoutsourcing.com/