Obama Prepares to Screw his Base

[Sbane]

Because obviously we will never get old and stay forever young.

[Sbane]

Because obviously we will never get old and stay forever young.

I just knew you would show up sbane.   And I am impressed that you have such a long time horizon, and are so patient. Well done sir!

You think this cross subsidy is good policy?

Yes, for the most part, if the penalties in the individual mandate are able to force well off youngs to buy insurance policies. That is a huge if, of course. I think it is the right thing to do morally. It will make sick people more insurable on the individual market. A counterbalance to this, some means testing of Medicare, should also be instituted.

[Sbane]

Sbane, I still don't quite get why youngs, just because they are young, should subsidize olds, just because they are old, as opposed to just means testing regardless of age. It seems nutter to me. I understand the politics (part of it being the youngs tend to be less informed about these things), but that does not make it right.

It makes sense to me because it's almost like you are paying into the system when you can most afford it (I would prefer it be a Bismarck system with a lot of the costs being paid through payroll taxes but that's teh socializm!! panic! panic! panic!), and reaping the benefits when you are older and could be ruined by health costs. Mind you that this is only going to be affecting health plans that cover a small number of people or individual plans. These cross subsidies are already in effect in many large company plans (group plans). So all this does is make it easier for older people to buy their own insurance or start their own companies when they are older.

[Sbane]

well the actual numbers won't be out until 2014, but it's a well known fact that the bill subsidizes for it anyone who has difficulty paying their going rate.

The going rate for many youngs now is zero - they don't buy insurance. Why should they?  When you have a zero net worth, having insurance is just silly, isn't it?  But it is nice that the government will subsidize premiums for those who can't afford it, and subsidize olds who can as well, while all the while, Obamacare was supposed to save money. This puppy is a trifecta. Awesome!

Aren't you over 26 BRTD?  Let me know what happens to your premiums, won't you?

I dunno what the current price is, because I don't buy insurance now and don't need it.

So what if you get into a car accident tomorrow and have 50k in hospital bills and subsequent physiotherapy? Do you have that sort of money lying around?

[Sbane]

Sbane, I still don't quite get why youngs, just because they are young, should subsidize olds, just because they are old, as opposed to just means testing regardless of age. It seems nutter to me. I understand the politics (part of it being the youngs tend to be less informed about these things), but that does not make it right.

It makes sense to me because it's almost like you are paying into the system when you can most afford it (I would prefer it be a Bismarck system with a lot of the costs being paid through payroll taxes but that's teh socializm!! panic! panic! panic!), and reaping the benefits when you are older and could be ruined by health costs. Mind you that this is only going to be affecting health plans that cover a small number of people or individual plans. These cross subsidies are already in effect in many large company plans (group plans). So all this does is make it easier for older people to buy their own insurance or start their own companies when they are older.

It might be a fun poll: ask youngs if they prefer paying twice as much as they should now, if they can afford it, in exchange for paying 25% less when they hit age 55 or something.

Yes, it would be a fun poll, no doubt, but very irrelevant. A lot of those people already pay higher rates (but a lot of it is subsidized by their employer) because they are in a group plan. All this is doing is extending that principle on to individual and small group plans.

Unless you are a young lawyer, or in some other profession where you aren't working for a large corporation, there isn't much of a reason to care about this. Unless you don't buy health insurance that is. Even there, buying high deductible plans is the way to go. Unfortunately, Obamacare restricted that. Let's have a little outrage about that, why don't we?

Also, as pointed out by Ezra Klein, something that hasn't been publicized so much is that Obamacare raises taxes on those making 250k+. Those making that much money tend to be old so there's at least some means testing in the bill.

[Sbane]

Again the age discrimination in group plans is a state generated rule where it exists, and is far more muted than what is in Obamacare. So while the principle is the same, the magnitude is not. Magnitude matters.  I mean, I favor progressive taxation just like you do, but we still argue some about the magnitude of the "progressivity" (among other things) don't we? 

I am not aware of employers charging you a different premium based on your age. Does this actually happen?

[Sbane]

Again the age discrimination in group plans is a state generated rule where it exists, and is far more muted than what is in Obamacare. So while the principle is the same, the magnitude is not. Magnitude matters.  I mean, I favor progressive taxation just like you do, but we still argue some about the magnitude of the "progressivity" (among other things) don't we? 

I am not aware of employers charging you a different premium based on your age. Does this actually happen?

No, but the rates that the carriers charge based on those in the plan are state regulated, and mandate age discrimination, albeit as I said, at a lower level than Obamacare. The youngs in essence are subsidizing in particular uninsured olds, so they can get insurance at lower rates than otherwise.

I don't get what you are saying. As far as I know, any person who works for a large company that offers healthcare does not pay more or less based on their age. Am I wrong about this? If I am correct, this is pure community rating which is even more "radical" than what Obamacare does with the individual market.

[Sbane]

Again the age discrimination in group plans is a state generated rule where it exists, and is far more muted than what is in Obamacare. So while the principle is the same, the magnitude is not. Magnitude matters.  I mean, I favor progressive taxation just like you do, but we still argue some about the magnitude of the "progressivity" (among other things) don't we? 

I am not aware of employers charging you a different premium based on your age. Does this actually happen?

No, but the rates that the carriers charge based on those in the plan are state regulated, and mandate age discrimination, albeit as I said, at a lower level than Obamacare. The youngs in essence are subsidizing in particular uninsured olds, so they can get insurance at lower rates than otherwise.

I don't get what you are saying. As far as I know, any person who works for a large company that offers healthcare does not pay more or less based on their age. Am I wrong about this? If I am correct, this is pure community rating which is even more "radical" than what Obamacare does with the individual market.

No, or course nominally the employer pays the premium. The premium rate is regulated, so an employer employing a bunch of geezers pays less than the actuarial risk, and the reverse, if it is an IT outfit filled with 20 somethings all wearing tight jeans. At least I think that is the case, but it is just possible I am full of it here, when it comes to employer plans (it is certainly true with individual plans, which among other reasons, is why my carrier loses a bunch of dough on me. I am sure Blue Cross/Anthem prays for my early and immediate death. 

Now that is actually true, and of course it will depend from state to state. Still, my point is that those who are employed by large organizations will see minimal to no change from the change in policy. It is really the small group and individual markets that will get affected.

Also, what the hell do tight jeans have to do with good health?

[Sbane]

Wait, so you're telling me my premium will be higher for the ONE YEAR where I am not eligible to be covered by my parents? OBAMA HOW DARE YOU!!!!! 

No, it doesn't go like that. It's not a cliff, it's a slope.  Regardless of the law, as you age, you'll pay more and more until you hit Medicare. The law just means that the increase will come sooner rather than later.  Since younger people are less likely to have employer-sponsored insurance, and tend to have less income to buy health insurance, that doesn't strike me as a good deal.  How much individual subsidies will help I don't know.

This is not true at all. The new law would benefit those in their 40's and 50's (or who are otherwise in poor health) but "screw" those who are younger and healthier. Of course, if you want to lower overall insurance premiums, this is the way to do it. Medicare doesn't have much to do with it.

[Sbane]

http://www.bakerlaw.com/alerts/special-health-care-reform-series-health-insurance-exchanges-from-the-employers-perspective-8-7-2012/

Obamacare community rating does not affect the large employer group market. This is defined as having more than 100 employees. Of course they can't participate in the exchanges for now either, though that may change.

[Sbane]

Wait, so you're telling me my premium will be higher for the ONE YEAR where I am not eligible to be covered by my parents? OBAMA HOW DARE YOU!!!!! 

No, it doesn't go like that. It's not a cliff, it's a slope.  Regardless of the law, as you age, you'll pay more and more until you hit Medicare. The law just means that the increase will come sooner rather than later.  Since younger people are less likely to have employer-sponsored insurance, and tend to have less income to buy health insurance, that doesn't strike me as a good deal.  How much individual subsidies will help I don't know.

This is not true at all. The new law would benefit those in their 40's and 50's (or who are otherwise in poor health) but "screw" those who are younger and healthier. Of course, if you want to lower overall insurance premiums, this is the way to do it. Medicare doesn't have much to do with it.

I see no reason why this law would decrease the average person's insurance cost over their lifetime.

If the law had some teeth (as in high enough penalties to force everyone to get insurance), theoretically it would lower costs. Right now many healthy people forgo insurance because they think they don't need it. If you create a healthier pool, premiums will go down.

[Sbane]

Wait, so you're telling me my premium will be higher for the ONE YEAR where I am not eligible to be covered by my parents? OBAMA HOW DARE YOU!!!!! 

No, it doesn't go like that. It's not a cliff, it's a slope.  Regardless of the law, as you age, you'll pay more and more until you hit Medicare. The law just means that the increase will come sooner rather than later.  Since younger people are less likely to have employer-sponsored insurance, and tend to have less income to buy health insurance, that doesn't strike me as a good deal.  How much individual subsidies will help I don't know.

This is not true at all. The new law would benefit those in their 40's and 50's (or who are otherwise in poor health) but "screw" those who are younger and healthier. Of course, if you want to lower overall insurance premiums, this is the way to do it. Medicare doesn't have much to do with it.

I see no reason why this law would decrease the average person's insurance cost over their lifetime.

If the law had some teeth (as in high enough penalties to force everyone to get insurance), theoretically it would lower costs. Right now many healthy people forgo insurance because they think they don't need it. If you create a healthier pool, premiums will go down.

Only if you do cross subsidies, and you know I loathe that concept based solely on age, or to a lessor on any other basis, other than based on means. Sure it will save money if the number of free loaders who can afford insurance premiums paid out of their own pocket, start paying them, rather than leaving unpaid medical bills strewn around.

Yes, cross subsidies are needed. They happen in every single other nation in the entire planet of ours. It is not that controversial.

Speaking of means, why not have everyone pay a certain percent out of their income for their premium and create a large group that the Hospitals are beholden to? Perfect way to means test and lower overall costs at the same time.

[Sbane]

Cross subsides non means tested are controversial to me. Maybe I am just weird. The percentage of income thing sounds like another tax. We can chat about tax policy another time. I am out of here. I am going on a double date tonight, and need to get ready. Cheers.

For which you get health insurance. Not that it is the only way to fund a public option (which can be private, I frankly don't give a sh**t, but it needs to be big, big and maybe a little bigger than that), you could also have people pay out of pocket with subsidies based on income. The big group is necessary though since purchasing power is everything. Every single one of us should be paying the Medicare rate at hospitals.