The Crimson White has recently published several touching stories and columns about the impact of President Obama’s health insurance reform law, the Patient Protection and Affordable Care Act (ACA). These stories have featured current and former UA students who have remained on their parents’ health insurance plans, either while pursuing their career of choice or for actual health care services.
The ACA allows children to remain on their parents’ plan until age 26, but when young people become participants in the health insurance market, this perceived benefit vanishes in light of the ACA’s cost.
The ACA will achieve its goal of increasing health insurance coverage in the United States primarily by shifting health care costs from older Americans to younger Americans and from willing insurance purchasers to taxpayers.
To the extent that the health law reduces costs for some, it increases them for others. Young people who choose to remain on their parents’ plan until the age of 26 will be spared the burden of having to buy health insurance during those years, but after they turn 26, they will be required to purchase government-approved health insurance.
Because these government-approved plans limit insurer’s ability to charge customers based on their actual health risks, younger and healthier Americans will pay artificially high premiums to finance care for older, sicker consumers.
To be clear, the authors do not oppose providing assistance to citizens in their twilight years. However, this legislated transfer of wealth under the ACA is in addition to future unfunded liabilities from Social Security and Medicare and an already existing national debt of roughly $16 trillion that members of generations X and Y will eventually have to pay.
The ACA also expands coverage by offering premium assistance to working families, using government funds to offset part of their health insurance bill. Again, the ACA does not reduce the cost of their care, but simply transfers that cost to the government. Paying less money for health insurance premiums does not reduce the burden of exorbitant health costs if those costs have to be picked up by taxpayers.
When President Obama jump-started a needed national conversation on health care reform in March 2009, he seemed to understand this “no free lunch” reality. He rightly pointed out that reform required controlling escalating cost.
He then imposed a summer deadline for the Democratic-controlled Congress to produce health care reform legislation. When Congress inevitably failed to pass a bill remaking a fifth of the American economy in that timeframe, the president shifted his message, looked for a political boogey-man, and embraced less audacious health insurance reforms. The result is a law that falls far short of the president’s original goals and will only increase the unsustainable trajectory of health care spending by further obscuring its true cost.
A better approach would embrace choice and competition in the health care market. Insurers and providers, competing for new customers, would constantly be challenged to offer better care at a lower price. Lower prices would, in turn, make the health care system more accessible to the millions of Americans who currently can’t afford coverage and reduce the costs taxpayers bare for public health care programs that provide assistance to those truly in need. A competitive health insurance market would respond to consumer demand and create insurance plans that serve the unique needs of different consumer groups. Such a system would allow young people to select an affordable plan that provides the level of services they need, not an expensive government-approved plan.
Health care reform is a complicated issue, and readers of this newspaper deserve accurate information about the deficiencies of the ACA and superior policy alternatives.
Over the coming weeks, we will criticize the ACA based on objective reports, offer policy ideas that could reduce cost and expand coverage and honestly concede where those ideas have shortcomings.
Ryan Sprinkle is a second-year JD candidate at The University of Alabama School of Law. Tray Smith is the online editor of The Crimson White. This column is the first in a series on healthcare reform.
