Saturday night, the Senate voted to go to debate about health care reform: so let the debate begin! Many Senators will be getting an ear full from their constituents as they return home for Thanksgiving. That’s because while a couple dozen Senators may be ready to “debate” the minutiae of how the health care bill would work, most Americans reject the Democrat’s big government vision of health care reform.
There are many reasons to reject reform: higher insurance premiums, higher taxes, more bureaucracy, government mandates of coverage and treatment options, and, of course, more debt. Robert Samuelson highlights another reason Americans should be uncomfortable with this legislation. It’s another example of the government taking from the young to give to the old:
Whatever the added burden, it would darken the young’s already poor economic prospects. Unemployment among 16- to 24-year-olds is 19 percent. Peter Orszag, director of the Office of Management and Budget, notes on his blog that high joblessness depresses young workers’ wages and that the adverse effect — though diminishing — “is still statistically significant 15 years later.” Lost wages over 20 years could total $100,000. Orszag doesn’t mention that health care “reform” might compound the loss.
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 pre-existing health conditions, it says. The House legislation bans those, so it should also ban age-based rates. AARP dislikes even the 2-1 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.
On health insurance, we may choose to override some risk adjustments (say, for pre-existing medical conditions) for public policy reasons. But the case for making age one of these exceptions is weak. Working Americans — the young and middle-aged — already pay a huge part of the health costs of the elderly through Medicare and Medicaid. These will grow with an aging population and surging health spending. Either taxes will rise or other public services will fall. Already, all governments spend 2.4 times as much per capita on the elderly as on children, reports Julia Isaacs of the Brookings Institution. Why increase the imbalance?
Samuelson doesn’t mention (in this piece, he certainly has in others) the extent to which we are already crippling future generations with debt. The debt burden is already like a endowing each child born today with a $40,000 mortgage-but without giving them a house. Is this really how we parents want to treat our children?