On Raising Premiums — And Raising the Retirement Age
Earlier this week, the Center for American Progress released a report about the potential effects of raising the retirement age. Among the reasons cited in the report to oppose an increase in the retirement age was the following:
Since 65- and 66-year-olds would be older and on average less healthy than the nonelderly population in the exchanges, shifting these individuals to the exchange pools would increase premiums for all enrollees in the exchange by an average of about 3 percent. Premium increases in the exchanges would be highest for the youngest exchange beneficiaries, as those younger than age 30 would see an increase of 8 percent and those between the ages of 30 and 34 would see an increase of 5 percent. Such substantial increases in premium costs for young and relatively healthy individuals could result in these individuals choosing not to purchase health insurance—a process known as adverse selection—which would increase costs for the less healthy individuals remaining in exchanges. This scenario could threaten the viability of the exchanges.
These claims are particularly interesting for CAP to make, because there’s one law that guarantees skyrocketing premiums for young Americans – and it’s called Obamacare. An Associated Press study, and story, the week after the law passed noted the impact:
Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans — a shift expected to raise insurance premiums for young people when the plan takes full effect. Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press….The higher costs will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years.
So if the Center for American Progress really wants to lower premiums for younger Americans – as opposed to attempting to defend America’s unsustainable status quo on entitlements – it should whole-heartedly endorse a repeal of Obamacare, and its onerous new regulations that will jack up premiums for millions of 20-somethings nationwide.