Hope I Die Before I Get Health Care Reform?

A reader asked today “If no PO, what do young and healthy (obama’s biggest supporters) get besides better insurance regulation?”

The short answer is not much.

That said, the reason young and healthy people aren’t getting much out of Obamacare has nothing to do with the presence or absence of a public option. After all, the whole point of a public option is to try to create an insurance plan whose operating model doesn’t consist overwhelmingly of risk-screening and marketing. Young and healthy people don’t need an option like that, sick people do. More generally, the young and healthy don’t get much out of Obamacare because young and healthy people don’t need much health care. The way insurance works, in general, is that the healthy are subsidizing the sick and the young are subsidizing the old.

One important issue in health reform is the extent to which community rating will still allow insurers to charge different premiums based on age. The way this has played out in congress the “liberal” position is that differentials should be small—i.e., the young should heavily subsidize the old—whereas the “centrist” position is that differentials can be bigger. I’m not really sure why one would be regarded as more liberal than the other, it seems a bit arbitrary to me.

Probably the biggest impact on young people has to do with gender. Young women have substantially more health care needs than do young men. Consequently, on the present-day individual market women have to pay higher premiums. All versions of health insurance reform would change this, creating higher premiums for men and lower premiums for women. That’s a big deal, and take note that young women will almost certainly save more money through this provision than Bart Stupak can possibly cost them by screwing them out of abortion coverage. Note, though, that none of this has any applicability to those young people (like me!) who get insurance through our employers—it only relates to those who are currently uninsured or else buying insurance on the individual market. Over the long run there will be broader impact, but today’s young people will be older by then.

Mostly, though, universal health care isn’t about helping healthy people. It’s about helping sick people. Whoever’s young today will be older one of these days, and we’re all at risk of falling sick. Insurance is about insuring against that possibility.