Young, Healthy and Rich Need Obamacare, Too
By Ezra Klein - Bloomberg, Aug 16, 2013
Health insurance isn’t like other forms of insurance. It’s not protection against the unlikely; it’s insulation against the inevitable. Most people never use their fire insurance. Almost everyone uses their health insurance. Eventually.
The key is that not everyone uses their health insurance at the same time, or with the same frequency. Sick people use it more than healthy people. The elderly use it more than the young. Women use it more than men.
The trick to making any health-insurance system work is to attract enough healthy and young people into the insurance pool. Their low costs offset the care provided to elderly and unhealthy people, who drive costs up. This is the task that obsesses the Barack Obama administration. It’s also the task that has begun to obsess its opponents. “The whole scheme is enlisting young adults to overpay, so other people can have subsidies,” Dean Clancy, vice president of public policy for FreedomWorks, told my Wonkblog colleague Sarah Kliff. “That unfairness reminded us of the military draft.”
Clancy is wrong: The subsidies are funded by taxes on rich people and by cuts to Medicare spending, not by the premiums paid by young people. In fact, young people are likely to be the biggest beneficiaries of the subsidies because they’re more likely than any other age group to be poor and uninsured.
(More here.)
Health insurance isn’t like other forms of insurance. It’s not protection against the unlikely; it’s insulation against the inevitable. Most people never use their fire insurance. Almost everyone uses their health insurance. Eventually.
The key is that not everyone uses their health insurance at the same time, or with the same frequency. Sick people use it more than healthy people. The elderly use it more than the young. Women use it more than men.
The trick to making any health-insurance system work is to attract enough healthy and young people into the insurance pool. Their low costs offset the care provided to elderly and unhealthy people, who drive costs up. This is the task that obsesses the Barack Obama administration. It’s also the task that has begun to obsess its opponents. “The whole scheme is enlisting young adults to overpay, so other people can have subsidies,” Dean Clancy, vice president of public policy for FreedomWorks, told my Wonkblog colleague Sarah Kliff. “That unfairness reminded us of the military draft.”
Clancy is wrong: The subsidies are funded by taxes on rich people and by cuts to Medicare spending, not by the premiums paid by young people. In fact, young people are likely to be the biggest beneficiaries of the subsidies because they’re more likely than any other age group to be poor and uninsured.
(More here.)
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