Apr 08 2010

Young adults, with less money, will pay more

I just want to say thank you, once again, to all the young adults who voted for Obama. The fact that you volunteered to pay more for my health coverage and retirement is a sign of real respect for your elders.

Health premiums could rise 17 pct for young adults

Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans, a shift expected to raise insurance premiums for young people when the plan takes full effect.

Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press. The analysis did not factor in tax credits to help offset the increase.

The higher costs will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years.

Consider 24-year-old Nils Higdon. The self-employed percussionist and part-time teacher in Chicago pays $140 each month for health insurance. But he’s healthy and so far hasn’t needed it.

The law relies on Higdon and other young adults to shoulder more of the financial load in new health insurance risk pools. So under the new system, Higdon could expect to pay $300 to $500 a year more. Depending on his income, he might also qualify for tax credits.

At issue is the insurance industry’s practice of charging more for older customers, who are the costliest to insure. The new law restricts how much insurers can raise premium costs based on age alone.

Insurers typically charge six or seven times as much to older customers as to younger ones in states with no restrictions. The new law limits the ratio to 3-to-1, meaning a 50-year-old could be charged only three times as much as a 20-year-old.

The rest will be shouldered by young people in the form of higher premiums.

Higdon wonders how his peers, already scrambling to start careers during a recession, will react to paying more so older people can get cheaper coverage.

Of course, these people who are telling you that your premiums will go up by 17% are just trying to break it to you gently, to let you find out the truth in stages.  But this IS the government we’re talking about, and this IS an entitlement program, so you know, don’t you, that the real cost is going to be more.  Much more.  Social security, Medicare, Medicaid, etc., all cost much more than anyone dreamed they ever would.   So will this.

And, of course, for the many young adults who could afford health insurance but have simply chosen not to buy it themselves (something like 1/3 of the currently “uninsured” if memory serves), their cost under the new regime will be much more than they currently pay…  which is nothing.  But we really need to grab these deadbeats and shake some money out of them.  Don’t they know that their turn will come later, to have the generations after them pay for their healthcare?

The young musician in the article above, Nils Higdon, is a perfect representative for your demographic, because even though he’s about to be soaked, he is willing for it to be even worse, by being for single-payer health care (you can read about it at the link above).  Very generous of him.  And you, since I’m sure you agree, being a young Obama voter who really respects your elders, and wants to take care of them even more.

I suppose it’s just a good thing for me that most young drummers haven’t read Adam Smith, or F.A. Hayek, or Milton Friedman, or Thomas Sowell.  Undoubtedly, the screeds from these promoters of the greed motive would have poisoned their young, impressionable minds.

I see that Mr. Higdon is a self-employed drummer.  In the real world, in this economy, that sometimes means he makes most of his living as a golf caddy.  I’ve always thought that golf caddies should pay more for the health care of the old duffers, er, golfers, that they serve.  I mean, since the caddies already fund their retirement via social security and incompletely funded government pensions and so on, it just seems reasonable. 

If you’re going to carry their clubs, you may as well carry them, too.