Young people reelected the president. Now, they get to pay disproportionately for ObamaCare.
By Ben Smith
President Obama's enemies often accuse him, in the starkest political terms, of crudely acting to shift resources toward his political base: green-energy donors, single women, Latinos, African-Americans.
But the next 12 months are likely to reveal the opposite. Imminent elements of Obama's grandest policy move, the health-care overhaul known as ObamaCare, are calculated to screw his most passionate supporters and to transfer wealth to his worst enemies.
The passionate supporters are the youth, who voted for him by a margin of 60% to 36%, according to exit poll samples of people 29 and under. His enemies are the elderly: Mitt Romney won 56% of the votes from people 65 and over. And while one of ObamaCare's earliest provisions was a boon to the young, allowing them to stay on their parents' insurance through the age of 26, what follows may come as an unpleasant surprise to many of the president's supporters. The provisions required to make any kind of health insurance plan work — not just ObamaCare, but really any plan of its sort — require healthy young people to pay more in health insurance than they consume in services, while the elderly (saved by Sarah "Death Panels" Palin from any serious attempt to ration expensive and often futile end-of-life care) consume far more than they pay in. There is always a push and pull, however, and this year will be spent laying plans to shift the burden further toward the young.
State and federal officials and the health-care industry are currently preparing to implement two specific ObamaCare provisions taking effect on Jan. 1, 2014, acting on this politically perverse principle of shifting resources from your supporters to your opponents. The first is the individual mandate, which aims to force the young, childless, and healthy — "Young Invincibles," as they are said to think of themselves — to buy health insurance, even if they think (and even perhaps make a rational, if risky, bet) that they don't need it.
The second is a lesser-known policy to limit the practices of charging different premiums to different ages, known as age-rating. Many states currently set a limit on this difference, often mandating that an old person shouldn't pay a premium more than five times a younger person's, even if she's expected to use more than five times as much health care. The ObamaCare provision kicking in next Jan. 1 would reduce that ratio to three-to-one, essentially limiting what the elderly pay in part by forcing young people to carry a larger share of the total cost of national health care.
The raw politics aside, there is certainly a reasonable case for sparing the elderly exorbitant premiums, and for forcing young men to buy insurance before they wreck their motorcycles. The Health Care Blog's Maggie Mahar points out that a 60-year-old unable to buy insurance is in a far worse position than a 27-year-old forced to pay a bit more, though she and others worry that the costs will keep some young people from buying care for themselves and their children. (There are also provisions yet to come that benefit the young; subsidies for people buying insurance on the individual market are expected to be disproportionately used by younger people.)
Meanwhile the AARP, the implacable lobby for retired people, has been energetically making the case that the young should pay up.
In an interview, AARP legislative policy director David Certner didn't contest the suggestion that young people would be forced to pay more, but argued that it was a matter of the common good, not simply the interest of his constituents.
First of all, he told BuzzFeed, the young may not be paying their fair share: "Younger people pay less in taxes than they do when they're middle aged and have higher incomes."
And second, they'll be old someday too:
"It's about having a big insurance pool because everyone benefits from it," Certner said. "If a younger, healthier person is spending a little more now, it's OK because at some point they're going to be a less healthy, older person too."
This is a reasonable policy argument, though it's worth noting that every interest group argues its interests are identical to the common good. Cutting my taxes will stimulate the economy; spending on defense technologies will protect the homeland; maintaining my work rules will protect students; etc.
But politics is about power and resources, not about policy and morality. AARP has no real case to make there. The current young supported Obama; and the current old opposed him.
The near-total silence on this issue is a mark of a class that is either utterly selfless (hard to believe, honestly) or, as usual, singularly bad at seeing and defending its interests.
And so this vast transfer or resources from young to old — just the latest in a long line of these transfers — hasn't been discussed much because it is totally uncontroversial. Compare it to the footnote that has at times turned into a national obsession: religious conservatives' objection to a provision favoring the young (and possibly saving money), the new requirement for private coverage of contraception.
The voices raised against age rating and other policies tend not to be the most credible. They are, first, conservatives who simply see this as another wedge against Obama and his new policy. Outlandish rhetoric about the health-care law's threat to American freedom can make it hard for members of either party to consider policy on the merits; and so the proposal from Georgia Rep. Phil Gingrey (in the news of late for theorizing that " tense and uptight" women, like, say, rape victims, are less likely to conceive children) to leave age discount decisions with the states is generally considered as gimmicky as its name: The Liberty Act. (It's short for "Letting Insurance Benefit Everyone Regardless of Their Youth.")
The other main source of criticism of age rating has been the insurance industry, which worries that it will be blamed for rising premiums and that it will find it hard to sign young people up to expensive plans. Its main lobbying group, America's Health Insurance Plans, has been quietly briefing reporters on the threat and circulating a catchy infographic suggesting that age rating will be a major threat to the success of ObamaCare — not just to the industry bottom lines. And insurers told the conservative American Action forum that small employers' premiums for healthy people 27 and under are likely to increase an average of 169%, while less-healthy people 55 and older would see their costs decrease less than 25% (a smaller percentage, of course, of a much larger sum).
If you don't consider ultra-conservative Republicans and the insurance industry particularly credible sources in this argument, though, look to a young persons' lobby, such as it is. Young Invincibles, a liberal group best known for supporting the Affordable Care Act (and filing an amicus brief in support of the individual mandate), wrote to the Department of Health and Human Services last Dec. 26 rather meekly suggesting that age rating be watered down a bit.
"While young people have both a societal and individual interest in ensuring that older adults can afford to purchase coverage, no one benefits if young people who are not protected by this cushion do not buy on exchanges," the group wrote.
So attack Obama on whatever grounds you want, and accuse him, if you like, of rewarding his friends and punishing his enemies. But that charge, true to some degree of most politicians, may be less true of this one than any other in recent memory. The central question, as Mahar notes, is, "How do we choose between children and their grandparents?" In any normal political calculation, that answer would be clear: You choose the ones who voted for you.
CJ Lotz contributed to this report.