Democrats will soak the young
Looking at the Ponzi schemes that are Medicare and Social Security, I’ve often wondered which generation of Americans will get stuck with the tab when the programs go totally broke. More and more, it looks like mine will.
Yet paying for baby boomers to retire comfortably, while knowing we’ll probably never be afforded the same luxury, isn’t enough. We’re also being asked to pay the cost of Democrats’ health insurance proposals — both now and in the future.
One part of this is pretty straightforward. A new health insurance entitlement will mean higher tax rates.
Not only “the rich” will get hit. The Wall Street Journal calculated in February that even if the feds took every dime of every American’s taxable income above $75,000, they’d barely collect enough money to pay for President Barack Obama’s proposed 2010 budget of $3.5 trillion.
That budget doesn’t include a new health entitlement. And those figures certainly don’t account for the disastrous economic drop-off that would occur under such an outrageous tax.
So, taxes will rise for the middle class. Today’s young taxpayers will be taxed more now to cover some costs, and later to pay for Washington’s borrowing.
Taxes, however, are just the first part of Democrats’ plan to soak the young.
Liberal health reform means 20-somethings not only will be forced to buy insurance that many of them don’t buy now. They’ll also have to pay higher premiums than they are charged today — to the benefit of Americans their parents’ age.
Three staples of Democratic health proposals are a mandate that citizens buy insurance, a “community rating” requirement that precludes insurers from charging customers different rates based on factors such as age and a “guaranteed issue” stipulation that prevents insurers from denying coverage to any applicant, regardless of pre-existing conditions.
A University of Kentucky economist, Aaron Yelowitz, studied the impact these new requirements would have for younger adults versus their elders in a new paper for the Cato Institute.
He concluded that the three provisions “would drive [health insurance] premiums down for 55-year-olds but would drive them up for 25-year-olds — who are then implicitly subsidizing older adults.”
The culprit is the community rating, an aspect of Democrats’ plans that doesn’t get nearly as much attention as the mandate or guaranteed issue.
Yelowitz looked at premiums in New York, which already has community rating, versus California, which doesn’t. On the Web site eHealthInsurance.com, he found that 25-year-olds in Bell Gardens, Calif., can choose from 107 health plans. The premiums they pay are one-fourth to one-third of what 55-year-olds in the Los Angeles suburb can expect.
The site quotes similar prices for Atlanta, which has a younger population than most of America’s other large metro areas.
In Brooklyn, N.Y., on the other hand, the young can choose from just 12 plans, for which they must pay the same premiums as older customers — and about three times as much as 25-year-olds in Bell Gardens or Atlanta.
The community rating means young New Yorkers get no price break even though they tend to be healthier and consume less medical care.
The average price increase nationwide from community rating probably wouldn’t be as stark as the difference between California and New York, but it would be significant.
Consulting firm Oliver Wyman estimates that the kind of rating required in the House-passed bill would increase costs for the youngest and healthiest insurance buyers by 69 percent. That would mean about $800 a year more for 25-year-old Atlantans.
Two-thirds of under-30 voters chose Obama last year. Yelowitz described this fact as “ironic.”
I’d call it self-destructive.
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123 comments Add your comment
Mike Harmon
November 11th, 2009
7:16 pm
Well said
TaxPayer
November 11th, 2009
7:45 pm
Kyle,
I worked for a Fortune 100 company for decades and was provided health insurance as part of my total compensation package. I started there in my late twenties. The people employed there, that also received this coverage as part of their total compensation, were pretty representative of the adult population in the surrounding communities with respect to age, race, education, political beliefs, etc. The younger and healthier employees therefore carried the bulk of the burden regarding the health care ‘payments’ (they were not actually deducted from one’s pay) since they rarely utilized this portion of their benefits while the older and/or less healthy employees received the most from this benefit while also receiving the equivalent or more vacation and equivalent or higher salaries and/or wages since these items were highly correlated with one’s seniority (at least within certain groupings and excluding a trivial number of outliers).
So, if most of the working population were to be subjected to similar conditions (and I suspect that many that are employed by the larger corporations are) throughout their working lives, how would their situation change if your worst fears were realized and everyone was suddenly required to have insurance? (By the way, do you recall what sort of exclusions and/or exceptions have been included in the various plans for small companies. I seem to recall wording that effectively excluded them from any added cost burden via tax credits, etc.)
On a side note, I’d also like to know if you think that persons that purchase individual policies should be afforded the same protections as persons covered on group policies. Finally, I have a few questions for you regarding social security and Medicare but I best let those lie for now. No sense in pushing it, eh.
Joan
November 11th, 2009
8:51 pm
I haven’t heard whether all those “middle class” people making $25000 or less are going to be required to buy health insurance or go to jail. And what about all those entitlement types? Are they going to have to buy health insurance with their welfare checks? If all we had to worry about were people who work we might be able to deal with this monster. Unfortunately, an awful lot of that money will be going to people who never have and never will contribute a dime for anything. I want that bill killed so dead we don’t hear about it again for at least 20 more years.
Norbit
November 11th, 2009
9:02 pm
Joan, if you want to kill the bill you should offer to sleep with it! I’m sure it would die from the proposition.
Michael H. Smith
November 11th, 2009
9:04 pm
The Ponzi schemes!
http://www.ncpa.org/pub/ba514
‘Nuff said.
Del
November 11th, 2009
9:20 pm
Unfortunately, for the American people this bill is being driven by ideology. It could have been crafted to offer positive reform but that won’t be the case. It will either be rammed through and to quote Bill Clinton pass it and pretty it up later, I paraphrased his admonishment to the democrats in congress or it will die by the hand of moderate Democrats who face a potentially tough re-election battle next year. Hopefully, it will die because now is certainly not the time to turn over 6% of our economy to government.
Michael H. Simth
November 11th, 2009
9:24 pm
Yep, a Socialist’s ideology Del: It’s going to be tough getting use to saying, “We the Comrades”.
Aquarius
November 11th, 2009
9:35 pm
Democrats want to soak everybody who is productive and successful to pay for the losers and misfits who can’t take of their own problems
Misfit
November 11th, 2009
9:42 pm
Soak the rich, feed the poor and spread the love…..
I Want The Truth !
November 11th, 2009
9:46 pm
Sean Hannity makes “FAKE” videos to pimp his agenda.
Nancy PelosiCare stinks and is nothing short of a government takeover of your personal life.
All of this is a lie and a distraction designed to keep your eyes off the ball.
Watch the Federal Reserve…. Watch the value of our dollar versus.gold and oil.
You are getting screwed every single minute.
PLEASE —– Show up at Tea Parties !
Ask questions… Demand answers.
We The People have the power to change America.
Get involved. Blog. Speak Up!
hryder
November 11th, 2009
9:52 pm
Attention Congress, when ssi and medicare/aid are on a sound financial basis, if the majority(half +one) of the productive tax paying adult citizens want changes in their health care then and only then should changes be considered. Notice the caveate of productive tax paying adult citizens, not illegals, nontax paying leeches, or any others whose vote is up for sale to politicos with tax monies confiscated from productive citizens.
Craig A. Johnson
November 11th, 2009
9:57 pm
Kyle, Do you remember W.? Asked America to fight two wars without sacrifice; except the wealthiest 1% of the population (they get a tax break). As for the invasion of Iraq, what is a few million-billion-trillion, its someone else’s money and worry. And if the reason for invading is bogus, everyone else was fooled too! Not my problem. Healthcare in America currently is out of sync with Biblical teaching and decades behind other Western democracies. Environment care in America is in its infancy. The best solutions are made here, but bought by Europeans (e.g. Modern windmills). The national debt is great, but is it greater than a World Depression that would make Atomic Weapons more available to present terorists because nations with economies the size of Iceland collapsed? Do Conservatives Know Sacrifice Like They Know Hypocracy?
YUP>>> HE ADMITS THE VIDEO IS EDITED
November 11th, 2009
10:01 pm
Bulls*******
Choke….. Cough …. Choke
Bs…. BS .BS
Bobby dee
November 11th, 2009
10:31 pm
Gee! States can not even enforce mandatory auto insurance. I predict many people in the future will show up at the emergency room, just like they do now. Before the hospital gets paid for their services, the patient will have to pay the fine first. Just like car wrecks.
Artatlarge
November 11th, 2009
11:12 pm
Since the republicans are always wishing for a return to the Good Ol’ Days, let’s return to the Eisenhower years when the tax rate on the wealthiest Americans was on the order of %55+.
Maybe then we could get out of the hole dug by Reagan-esque tax cuts for the rich, and Bush-style borrow-and-spend profligacy.
But defending the health-care status quo is the worst solution for us, with Health Insurance Co. CEO’s pulling down over $100,000 per hour while 44,000 people a year die from not having insurance and thus readily-available health care.
Lets face it…if we want to fix our health-care system, tax vouchers won’t work…nor will tort reform (a pittance paid for ruined and lost lives that the above CEO’s would make in less than one morning)…nor will raising taxes on only the wealthy.
Tax money is all that can work. Relying on “free-market forces” will only result in more of the same. As unpleasant as it might be, and it is, everyone’s going to have to pay a little more. The poorest folk, who need the public option the most, will not be hit that hard, given the current tax structure for poverty. The middle class, who has the most to lose should things continue, may have to pay more taxes, but reigning in our out-of-control health-care costs will be worth it (given that so many bankruptcies are medical-expense-driven, less costly insurance and care might balance it out).
And if you think that retiring on Social Security means to “retire comfortably”, you’ve never known anyone relying on it, have you? Besides, those people have paid into the system for many years…it is NOT the hand-out you make it sound like.
And, no one is subject to prison if they don’t buy insurance, under the Democrat’s plan. That’s just another right-wing lie. So, so many.
Nick
November 12th, 2009
2:25 am
I’m one of those young voters who voted for Obama and I’d do it again in a heartbeat. The man is doing a far better job than McCain ever could have. Sure the healthcare bill isn’t as optimal as I’d like it, but Republicans rejected single payer off hand. What a bunch of chumps. More and more, I’m beginning to believe that the Republicans are the party of “no” and aren’t really fighting for me. They sure haven’t been the past 8 years, why start now? At least the Democrats are trying…
Gerald West
November 12th, 2009
5:37 am
Kyle, at his inauguration, President Obama was handed a $12 trillion national debt, a $1.2 billion federal budget deficit, and a looming economic depression caused by an irresponsible private sector sending $22 trillion up in smoke.
Irresponsible federal borrowing and squandering began with the Reagon administration and continued unabated except for a brief period when economic growth during the Clinton administration produced a burgeoning federal budget surplus.
So, how do you figure that “democrats” are to blame for 20 years of neglect and failure by Republican adminstrations and disfunctional Congresses?
Gerald West
November 12th, 2009
5:59 am
Here’s a tip for all writers of comments to the AJC: compose your text with a word processor that has spell-check, then paste it into the AJC comment slot. Otherwise, your typos and mis-spellings may detract from the message. I didn’t follow this advice for the above comment, and now find 3 mis-spellings and typos: Reagan, administrations, and dysfunctional. Shame on me!
Gordon
November 12th, 2009
6:17 am
The retreat position for liberals is always “but look at what Bush (or Reagan) did”. If you believe that Bush was wrong to spend as much money as he did (and he was), why would you support Obama for going down the same path at a much faster rate? WE ARE BANKRUPT AND ARE PRINTING MONEY! Even if this ridiculous health care plan wasn’t a terrible idea, we can’t afford it. We need laws that keep people from losing their insurance when they get sick, and to help with portability. It’s called regulation. But no, we add another huge ineffiecient government program that will add to our already unmanageable debt.
Nick @2:25, I wish I could be there when you wake up and realize what is happening to your future.
Jimmy62
November 12th, 2009
8:05 am
Healthcare in America is decades AHEAD of other countries. That’s why they buy drugs our pharma companies develop, and they send their doctors here to learn techniques our medical schools develop. If not for the free market in medicine in America, there would be a lot more sick or dead people in the world. Want to destroy innovation and sentence millions all over the world to die from diseases that otherwise would be cured in the future? Pass this bill.
Aaron Yelowitz
November 12th, 2009
8:12 am
Kyle – I wanted to thank you for citing my Cato study on your blog. If you have any additional questions, feel free to contact me. One of my main goals in doing the eHealth example was so that others could see how this redistribution would play out in their own communities.
Repukes and DummyCrats are ALL Scum
November 12th, 2009
8:17 am
Dummycrats robbing the young via taxes on the healthy to support the SICK, Repukes murdering the young in pointless foreign wars, I sure am glad my children are grown and out on their own in the world. Everyday, I laugh with malice at the lying, thieving, cowards in WashingAss, and move more of my wealth into gold, oil, silver, and foreign stocks. I did not have health insurance, ever, until I was 27 years old. I had never seen a dentist in my life up to that point. I had no cavities, no diseases, and I had paid no insurance premiums to insurance companies. Of course, if Lyndon Johnson had had his way, I would have been a grunt in Viet Nam, but I said “hell no” to that TexASS clown. Good old Uncle Lyndon would have provided third rate, but free health and dental care, which I did not need (Unless little brown brother punched a big fat hole in my hide). Time to put a leash on the WashingAss Scum, with a barbed choker collar.
Grob Hahn
November 12th, 2009
8:20 am
I get tired of hearing what “Obama was handed” or what “Obama inherited”. The man held up his hand and took the job AND the problems. He said he would fix it and made the problems his own. A president should NEVER whine about the previous administration in public. It’s not dignified.
Grobbbbbbbbb
fitzgerald
November 12th, 2009
8:33 am
Hope and change is doing just fine. I want to thank all of you folks, especially the young ones, for voting for Obama. With you thoughtful vote, my life is made easier with all of the free government benefits that I will receive for the remaining years of my life. Good points by all on this blog. Thankfully, I don’t have to rely on social security for my retirement.
William
November 12th, 2009
8:39 am
Well I am contributing all my extra money to oust all those reps. and senators who tried to pass this health bill. Even those from other states I will make contributions to their challenger. I encourage all of you to do the same. Vote out all the dems as soon as possible.
Your morning jolt: Ralph Long and his lonely endorsement of Mary Norwood | Political Insider
November 12th, 2009
8:47 am
[...] Some opinion: Kyle Wingfield thinks Democrats will soak the young. [...]
dewstarpath
November 12th, 2009
8:47 am
- Ten months into a Presidency is not long enough
of a time to determine how much something will cost.
Too speculative.
ohmy
November 12th, 2009
8:50 am
the political party that will get everything right is the one that will be “in” next…and so shall it always be
dewstarpath
November 12th, 2009
8:52 am
- It seems to me that the workplace insurance requirement
is similar to the automotive insurance required to drive a car.
I don’t believe that all jobs require the same level of coverage,
however. Actuaries and insurance adjusters should determine
rates based on job descriptions.
Kyle Wingfield
November 12th, 2009
9:29 am
Good discussion today, everyone. Thanks for keeping it civil.
Kyle Wingfield
November 12th, 2009
9:32 am
dewstar: One difference between auto and health insurance is that you can choose not to buy a car. Another is that what most states require is collision insurance — i.e., to pay for another party’s damage if you’re at fault in an accident.
Henry Grady
November 12th, 2009
9:43 am
THE YOUNG WILL NEVER GROW OLD!!!! We will just be paying for old people all our lives….or wait….
Every man, woman, or child for themselves! I’m tired of spreading risk between other people and sharing the burden. Oh wait…isn’t that what insurance is?
Doh.
Gregg
November 12th, 2009
10:00 am
Kyle, Even if were to stop spending today, our kids and grandkids would still be paying for the debt that we are now in. It amazes me at how Conservatives use this baseless argument. I don’t want my kids paying for this, Hah. They are going to pay if we don’t spend another dime toward the deficit.
Secondly, who pays for the people who go to the emergency rooms now without insurance? One guess, come on. That’s right we do? Who pays if you are hit by a driver without insurance? That’s right we do? You make it seems as though young people don’t get sick so therefore they don’t buy insurance. I got news for you health problems come at all ages. Especially now that PE is being taken out of school. Kids are getting bigger therefore will have more problems later.
I keep wondering about those people who have lost their jobs and have kids that may have conditions. What about them? Do they not desrve coverage? have you ever had to pay for COBRA, it costs about $1,000 per month for a family. That is plain crazy.
DannyX
November 12th, 2009
10:07 am
Democrats? Spending all your money and raising your taxes? LOL!
Please explain the following, Iraq war, Medicare Part D, massive government bailout. Not enough spending for you? How about some huge tax cuts to go along with the spending. Don’t worry though! The economy will fire up because of the tax cuts. Honest it will. Promise.
Of course Republicans don’t want to run on their record.
At least the Republicans were stopped before they could “fix” Social Security. Lucky for you thirty somethings. If you were allowed to invest your Social Security funds in the stock market we have some bad news for you. Your first 10 years in the work force has not been kind to your retirement funds. So far you would have to PAY $202.00 a month when you retire! A quarter of your work life has produced a deficit.
When do the tax cuts produce this bustling economy?
Dolores Umbridge
November 12th, 2009
10:07 am
Private medical insurance for healthy young adults who do not receive employer-provided benefits averages $1500 yr for premiums with a $5k deductible, no coverage for wellness checkups, no prescription drug coverage, and 50% paid on hospitalization.
Dee Raymond
November 12th, 2009
10:19 am
Kyle- Ga. requires automotive liability insurance. Yes, you can choose not to buy a car, but you cannot choose whether or not to get prostate cancer or MS. And if you ever have a child that needs neonatal intensive care or if you get a brain tumor, your AJC insurance will not cover it all. Everyone needs to review the “Lifetime Limited Benefit” section of their medical insurance policy. Get ready to sell your house and have your wages garnished.
Kyle Wingfield
November 12th, 2009
10:24 am
Gregg: I’m not saying this is the first debt future generations would be incurring — far from it. But frankly, the way to stop accumulating debt is to stop accumulating debt. That’s why, as I’ve written before, I don’t want the status quo or the “solution” we’re being offered now.
It seems to me that today’s politicians are trying to do what the generations before them did — create a new entitlement whose greatest burdens will be borne by someone else. At some point, “someone else” will run out of money. And I’m afraid we’re far closer to reaching that point than most people are willing to recognize.
booger
November 12th, 2009
10:27 am
Meanwhile Germany is considering a rather large tax cut in order to stimulate their economy. In the coming years we will have our tails kicked by countries who learned from our past successes while we rush to imitate the very worst of their economic policies. Karl Hess predicted this in the 1970’s.
Kyle Wingfield
November 12th, 2009
10:29 am
DannyX: So what happened to the economy between the 2003 tax cuts and the 2007 housing market collapse? And please explain to me how the tax cuts are responsible for the housing market collapse that provoked the financial market crash that got us where we are now — rather than a combination of loose money by the Fed, government subsidization of mortgage-backed securities, and government requirements that banks relax lending standards (the FHA is *still* giving out mortgages with only 3 percent down).
Kyle Wingfield
November 12th, 2009
10:30 am
And since I’m sure you’ll blame it on deregulation, please explain why the biggest problems occurred at the biggest banks — the very companies that are more regulated than any others in this country.
Regulation sounds like a nice solution, until you realize that the SEC’s 25-year-old lawyers are never going to keep up with the people they’re supposed to be monitoring. Create enough incentives for banks to take unreasonable risks, and don’t expect anything other than excessive risk-taking.
jconservative
November 12th, 2009
10:30 am
Good column Kyle.
Now let’s say we kill these health care bills and end up with the status quo. We are left with the Ponzi schemes of Medicare & Social Security (Kyle’s words). And Kyle is correct, his generation and those following (my kids & grand kids) are left with the bill.
So what do we do to resolve this “problem”? How do we keep Kyle & my kids out of the poor house?
Medicare – two drivers – increasing number of people who will be going on the rolls & the rapidly increasing costs of medical care. You can help some by raising the age age of Medicare from 65 to, say 67 – (the same as Social Security). That will delay the baby boomers & allow for more funds to accumulate. But this is only temporary.
The second solution is to slow, or decrease, the expanding cost of health care. How do you do that? That is where the debate needs to be and NO ONE is addressing that issue.
At this time there does not seem to be a national will to resolve the
pending crisis.
Kyle Wingfield
November 12th, 2009
10:34 am
As for Social Security, you’ve missed the point of what the Republicans tried (half-heartedly) to do. The point is that my Social Security funds aren’t sitting somewhere, growing and just waiting for me to collect them. They are going out in checks to current retirees, as fast as Washington can write them. This is how a Ponzi scheme works, and Social Security is nothing if not a Ponzi scheme.
Would my account have dropped if I were investing those funds? As sure as my 401(k) did (although there probably would have been restrictions on the kinds of investments that could be made with SS funds). But the point is that no one my age can realistically expect to get money out of SS, even if we sure are paying into it.
The end of SS won’t be pretty, but it will only get uglier the longer we act like there’s no problem.
booger
November 12th, 2009
10:52 am
We all know by now that the house health bill will put tax increases in effect immediately, while implementation of the plan would take place in about four years. Besides this being an outright deception in pricing the plan, there is a larger question.
Will the taxes collected during the first four years be put into a special account for health care? If not then this means they will go into the general fund, and thus be available for more pet projects. Does anyone know the answer to this?
Gregg
November 12th, 2009
10:59 am
But Kyle you are going with the status quo if we do nothing to repair the problems we have with healthcare. The best cure is prevention and without insurance you have no reason to go to the doctor until it is too late. then again we the taxpayers foot the bill because they do not have insurance coverage. You say no to healthcare however the sicker and fatter we get the more it cost even the most fit of us.
Every republican/conservative wants less government. however they do not want the fire or police station to close in their area. They do not want the post office to close in their area. When something happens and their INSURANCE won’t cover it they want to know what the GOVERNMENT is doing about it. It sees you want less government as long as it doesn’t affect you.
Kyle Wingfield
November 12th, 2009
10:59 am
I’m not sure, booger. My (admittedly cynical) guess is that the money wouldn’t be put in any sort of special account, since the only earmarking that goes on in Congress is for members’ pork projects.
DannyX
November 12th, 2009
10:59 am
Kyle, for 8 years all we heard was how cutting taxes would cure everything. Massive spending and tax cuts produced deficits. If Democrats are to be lectured and criticized for their spending fine, but please tell us why we should listen to Republicans right now? What on earth have Republicans done the past 10 years that deserves confidence in their judgment?
How in the world do Republicans lead on the economy issue? For years all we heard was tax cuts………
Massive spending, plus massive tax cuts explains the Bush years perfectly. How do you switch from that to “Democrats soak the young,” almost overnight?
TaxPayer
November 12th, 2009
11:01 am
Kyle,
Does your employer provide you with health insurance as part of you total compensation package?
Linda
November 12th, 2009
11:20 am
Artatlarge @ 11:12, 44,000 people a yr don’t die from not having health insurance.
The poorest folks don’t need the public option the most. They already have public health insurance. It’s called Medicade.
The nonpartisan Joint Committee on Taxation reported HR3802 specifies that those who don’t buy h.i. & don’t pay fines of about 2.5% of their income can face penalties of up to 5 yrs in prison. You may research section 7201 & 7203. According to the CBO, the LOWEST-cost family non-group plan would cost $15,000 by ‘06. That’s what they would need to stay out of jail.
Shananeeeee Fananeeeee
November 12th, 2009
11:23 am
Where are all those young people that were crying at Fraud-bama’s inauguration? They are really going to be crying soon enough. Obammy and his cronies are absolutely horrible for this country. Radical ideas and people do not work. This guy can’t even mourn the people who died at Fort Hood before having a preamble about the Native Americans. I agree the Native Americans went through bad things but to talk about that and then the Fort hood incident is just dumb. The country is taking notice, Dems are in trouble in 2010 and hopefully 2012 too.
whosoakswho?
November 12th, 2009
11:33 am
Democrats soak the young? Hardly. How about young soak the old? It’s what is happening now.