Obamacare's Cost-Shifting
It's well laid-out in this blog post by Randy Barnett at Volokh, with the uber-long title, "The Myth That the Individual Mandate Addresses Cost Shifting by the Uninsured, Part 2: 'Bronze Plans' Are Not the Same As Catastrophic Coverage":
One of the myths of the Affordable Care Act is that it designed to address the costs imposed on the health care system by uninsured healthy younger people who may incur unexpectedly high medical costs from, say, being hit by a bus, and who then shift these costs to those who have insurance. As I have discussed previously, several commentators have suggested that Justice Kennedy could uphold the mandate on the limited theory that the mandate uniquely requires individuals to pay to cover their own "actuarial risk"--i.e., the chance that they will suffer an unexpected, catastrophic healthcare cost that they could not pay for out of pocket.Among the flaws that I identified with this purportedly narrow defense of the mandate is that it is factually inaccurate: Obamacare does not simply make people buy catastrophic coverage that would cover their own unaffordable risks at a price that reflects their actuarial risk; instead, as several of the Justices recognized, it makes them buy comprehensive policies for a wide range of services they don't need in order to subsidize the law's other costly requirements, at a price in excess of the actuarial risk that they pose to the system. Rather than being a scheme to insure against the risk posed by younger persons, the Affordable Care Act creates a system of a government-mandated privately-administered redistribution of wealth from the young and healthy to older baby boomers.
...As Chief Justice Roberts and Mike Carvin both correctly pointed out during oral argument, even a "bronze" plan must cover a wide array of costly "essential health benefits"--including contraceptives, maternity and newborn care, counseling, physical therapy, preventive services and pediatric oral and vision care--that drastically exceed the types of unpredictable and unaffordable costs covered by normal catastrophic plans (and which might potentially result in cost-shifting).
...That is precisely why premiums for bronze plans would cost between $4,500 and $5,000 per year under the Act (as estimated by the CBO), whereas true catastrophic plans are currently available for around $420 per year (as quoted online for a policy that covers a thirty-year-old nonsmoker, doesn't cover preventative and other non-essential services, and carries a $10,000 deductible).
I have been paying for 99.8% of my own healthcare for years. I have healthcare from my work. But I'd rather not have my diagnoses on anyone's records.
If buying personal healthcare insurance was tax-deductible, I would have done it years ago.
Right now I and the rest of us are screwed, because we can't deduct insurance premiums from our personal income tax. Meanwhile businesses can.
Jim P. at April 12, 2012 7:34 PM
Um...you can deduct healthcare expenses from your taxes. You need to get a better accountant.
Kevin at April 19, 2012 9:47 AM
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