How ObamaCare Rips Off the 'Young Healthies'

If universal coverage is the goal, inexpensive, simple catastrophic health plans will do.

By Carl Schramm

When Obamacare is under attack, its defenders retreat to several well-worn claims. Among them is a provision that compels insurance companies to allow parents to keep their "children" ages of 21 to 26 on their family policies. Yet this part of the Affordable Care Act was not engineered in response to any noticeable interest group. Instead, political considerations are responsible for the provision, which is an unnecessary and a deceptive rip-off of the "young healthies."

The first consideration is that young adults facing chronic unemployment - thanks to government policies that have retarded economic growth - commonly return to their parents' home. Understanding that this is what the economic "new normal" looks like, the Obama administration sought to avoid a potential political storm by providing a benefit normally connected to holding a job for one of its most reliable support groups.

Second, government's actuaries are well aware that this much-touted benefit basically costs nothing. Actuarial and other research suggests that the average male sees a physician six times between the ages of 21 and 35. The parental coverage provision seemed like a "freebie" for the administration's universal coverage sales pitch.

Third, Obamacare's financing won't work unless "young healthies" (or their parents) pay through the nose for coverage under parental plans or via the individual mandate. The 18-26 age group is the lowest user of care, the least costly to cover and the most profitable of all health-insurance coverage. Yet the group faces extraordinarily high Obamacare rates. [more...]