What does ObamaCare mean for Young Adults?

I just finished a “briefing paper” by Aaron Yelowitz of the CATO Institute called ObamaCare, a Bad Deal for Young Adults. The article shows that young adults from the ages of 18-24 will be forced to subsidize the health care of older, higher risk insurance clients under universal healthcare as it’s currently proposed. This is because the proposed bill would impose price controls (a.k.a. “community rating”) on insurance companies, causing the insurer to be unable to offer lower  premiums for low risk customers. The low risk customers are the 18- 24 year olds.

Aaron Yelowitz points out 3 important terms you should know:

  1. Community rating. This means you pay for your health insurance not based on your own health characteristics but on the average characteristics of the community.
  2. Guaranteed Issue. This means that the insurer must issue insurance to all applicants regardless of their health characteristics.  The community rating along with the guaranteed issue would create a world where healthy 18-24 year olds end up subsidizing 55 year old smokers through higher rates and/or higher taxes.
  3. Individual Mandate. The individual mandate is comparable to the draft. Aaron Yelowitz describes it as ” similar to the concept of the military draft, where young adults are forced to supply their labor to the military at a specified wage, even if that wage would be insufficient for them to volunteer.”

What is so ironic about this is that 66% of the vote among adults aged 18-29 voted for Obama. Also, the federal government can not afford to subsidize health insurance for young adults. The only way this is possible is to further deficit spending and inflate the dollar or to raise taxes on those very young adults. Maybe if this bill is passed, young adults will be so dissatisfied they will be forced to wake up.

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