The incessant drumbeat of predictions that the Affordable Care Act will wreak havoc upon the land is a long, frustrated quest to find sympathetic victims. There are, to be sure, clear losers from the new health-care law. Rich people have to pay higher taxes to fund its subsidies. Many doctors and hospitals will lose some of their income stream from the law tightening up unnecessary care. Yet neither the medical specialist nor the hospital executive nor the upper-income taxpayer quite offer the politically sympathetic face of the Everyman struggling under Obama’s socialist boot conservatives are looking for. The search has instead come to focus on a new paradigmatic victim: the healthy, financially secure 25-year-old male.
California has announced that insurance companies have submitted premiums for its state-based Obamcare exchange, and the rates will come in lower than forecast. This is to say, the law may work, at least in this regard, even better than forecast — insurers can work under its guidelines, and competition is pushing the cost to consumers down, as hoped.
Good news, right? Avik Roy, former health-care-policy adviser for Mitt Romney, found a different way to frame the news: “Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146%.”
Roy’s piece, which gained widespread, wide-eyed circulation in the conservative media, was quickly and ruthlessly torn to shreds by Ezra Klein, Rick Ungar, and Jonathan Cohn, in a spectacle that resembled a pack of lions tearing every scrap of flesh off a dead warthog. I’d really urge you to read every one of those pieces and relish the carnage in every gory particular. But the gist of it is that Roy compared California’s plans to the teaser rates available on ehealthsurance.com. Those teaser rates turn out to bear little resemblance to actually available health-insurance rates — they exclude swaths of potential consumers for even minute health problems.
Possibly the most misleading part of Roy’s astonishingly dishonest screed is the entry point for his pseudo-investigation:
If you’re a 25 year old male non-smoker, buying insurance for yourself…
Likewise, Hoover Institute apparatchik Daniel Kessler warns in a Wall Street Journal op-ed, “Obamacare Is Raising Insurance Costs.” Here are his examples:
For example, a 25-year-old male who lives in San Francisco …
Oregon’s exchange policies are about the same. Today, a 25-year-old male who lives in Portland…
Do you notice a pattern here? This is a bit like the traveling medicine show salesman who picks the same random volunteer from the crowd at every stop. You, sir — the healthy 25-year-old in front who has never been hospitalized or needed medication in his life! Step right up!
These columns keep citing a healthy 25-year-old man as if they are offering up a randomly chosen example of how the exchanges will work. Healthy non-smoking 25-year-old males have very different health profiles than the average person.
It is true — and nobody has ever denied this — that the hypothetical 25-year-old male will pay higher insurance premiums under Obamacare. Now, this 25-year-old male probably won’t pay higher premiums under Obamacare if he does smoke, or have any potentially worrisome medical history, or have family members with any potential medical history, or even if he’s a perfectly healthy non-smoker from a perfectly healthy family but has a low enough income to qualify for tax credits to cover his premium costs. And of course he’d be unaffected if he already gets insurance through his employer.
So, we have narrowed the class of Obamacare victims down to a very, very small group of victims preparing to be crushed beneath the burdens of Obamacare. But to hold up this tiny sub-category as implicitly representative of the entire health-insurance market is misleading to the extreme.
What’s more, the interests of these Victims of Obamacare may be a bit broader than their conservative champions let on. Suppose you are a non-smoking, non-sick, non-poor, completely healthy 25-year-old from a completely healthy family who does not get employer-provided health insurance. Yes, you will be paying higher premiums. Not 146 percent higher, likely Roy falsely claims, but higher. Yet you may also contemplate the varying probabilities that one day you will be one or more of the following:
- a son, husband, or father of somebody who is sick
- no longer 25 years old
At that point, the freedom-crushing regulatory burdens of Obamacare may turn into a blessing. And this, of course, is the entire concept of insurance. Insurance is the spreading of risk. What distinguishes health insurance from insurance against, say, fire, is that insurers can make a much better guess which customer is likely to need medical care than which is likely to have their house burn down. Some people are bad actuarial health risks, and some people are good actuarial health risks.
That’s the whole dysfunction of our horrendous health-insurance system. The individual health insurance market is a tragic mess: People who need insurance the most can’t buy it, while the only people who can afford insurance don’t need it. That’s the reason for health-care reform.
The objections to health-care reform present themselves as if they’ve uncovered some kind of nightmarish bureaucratic inefficiency. What they’ve actually discovered, to the extent that they aren’t simply misleading people, is that a functioning insurance system takes money away from people who are healthy. Likewise, fire insurance screws people whose houses will never burn down.
That is what the Wall Street Journal editorial page implies when it complains that under Obamacare, “Americans are being forced to buy more expensive coverage than what they willingly buy today.” In the group-insurance market, like the kind of people who get it through work, this already happens — everybody pays the same rate, forcing the young and healthy to subsidize the old and sick, and hardly anybody complains.
The individual health insurance market is a disaster, but you have a handful of winners: young, healthy males unburdened by personal or familial illness. If conservatives hold sacrosanct their right to enjoy the full benefit of their good fortune, then it is tyrannical to force them to accept any of the burden of the health-insurance losers. It’s Rick Santelli–style Ayn Randism (“see if we really want to subsidize the losers’ mortgages?”) applied to health insurance.