Columnist Robert Samuelson recently pointed out an interesting part of the health-care “reform” bill passed by the House of Representatives:
It mandates that health insurance premiums for older Americans be no more than twice the level of younger Americans. That’s much less than the actual health spending gap between young and old. Spending for those aged 60-64 is four to five times greater than those 18-24. So, the young would overpay for insurance which — under the House bill — people must buy: 20- and 30-somethings would subsidize premiums for 50- and 60-somethings. (Those 65 and over receive Medicare.)
Political decisions like this are often are designed to equalize everything, regardless of reality. In this example, the goal is to lessen the gap between health-insurance costs for the elderly and the costs for younger Americans.
But insurance is a risk pool. The reality is that older individuals have on average greater health problems and associated costs than younger individuals. But, because older Americans have more political power (largely because they vote more), their interests often supercede the interests of younger generations (who don’t vote as much).
So, as is often the case in politics, reality takes a back seat to what the voters — and, consequently, the politicians they vote for — want. Reality tells a health-insurance company that its business model cannot run well after charging all individuals, regardless of age, around the same amount for coverage. But politicians seldom have to face reality. Their political survival rests on making their voters believe they can solve all of their problems without it costing anything.
The reality is those costs are often shifted to other groups with less political clout. In this example, the group is younger insurance holders who, by the way, will be required under the bill to obtain health-insurance meeting certain government standards. But often our elected officials decide to shift the costs to an even younger generation — those not born yet — through mounting debt. The unborn definitely do not vote.
Reality tells us that there is no free lunch. Politicians offer their voters a free lunch, after paying for it with money from those who don’t vote — at least not yet.