The Affordable Care Act Proving to be Anything But Affordable for Young Adults

During the fiscal cliff debate President Obama tried to frame everything in terms of people paying their “fair share.” So long as you “worked hard and played by the rules” the federal government would be there to make sure you had a decent life.

It’s rhetoric that resonates with many Americans. Who could be against paying their fair share? And certainly, working hard should earn you something, right? Of course, there’s the significant problem of President Obama getting to be arbiter of what is and isn’t fair, and who is and isn’t working hard. Sadly, redistributionalists are more than happy to come up with constantly shifting parameters largely dependent on how much they need to tax or how much they’re able to spend.

But, if President Obama truly believes in fairness, shouldn’t the axiom at least be fairly applied? And yet it’s not. Not by a long shot. For while President Obama spent the past several months pushing for fairness in the tax code (taking from the rich to spend on the less rich), he’s spent the past several years arguing for unfairness in our health insurance system.

The Hill reports:

“Young adults will see higher health insurance premiums under the Affordable Care Act (ACA) because of a provision that links prices for older and younger patients, according to a new study.

Actuaries at management consulting firm Oliver Wyman predicted the law’s age rating restrictions could mean a 42 percent hike in premium costs for people aged 21 to 29 when they buy individual coverage.

“’This means that close to 4 million uninsured individuals . . . can expect to pay more out of pocket for single coverage than they otherwise would, even given the availability of premium assistance,’ study authors wrote.”

That makes Obamacare one of the most egregious examples of backwards government redistribution in history. It accomplishes this mixed-up goal by imposing strict regulations on “age-rating” rules which will prohibit insurers from charging older beneficiaries from any more than three times what they charge younger ones. Although that may seem “fair,” it flies in the face of the economic reality that older adults generally consume about five to six times as much medical care as younger adults (and are thus about five times more expensive to insure than younger adults).

The upward redistribution is occurring despite the fact that young adults are poorer on average and more likely to be unemployed than older Americans. According to a recent study by economists at the Pew Research Center younger age groups are growing dramatically poorer relative to other age groups.

In 1983, households headed by people aged 65 and older were worth 10 times the median net worth of households headed by adults younger than 35. The trend has grown worse over the last two decades. Now, even after adjusting for inflation, older households have 47 times the typical net worth of the average younger household.

But it’s not just young adults who are suffering under the yoke of higher health care costs under Obamacare. It’s everybody. The New York Times reports:

“Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.”

Even some high-profile Democrats are admitting that Obamacare isn’t going to be the cost saving wonder bill they hoped. Democratic Gov. Jerry Brown is warning of large premium increases in his breakdown of the California budget.

“While every effort will be made to promote affordability, large rate increases in the individual insurance market are likely at the outset, due to the requirement to offer coverage to all individuals, provide a higher level of benefits, and due to a significant increase in enrollment which will increase demand for services,” he wrote.

And all this bad news from a bill called the Affordable Care Act. What sad irony.