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Obamacare requires young people to pay higher health insurance premiums in order to subsidize older people’s coverage. But don’t worry, say Obamacare’s defenders: Many young people will qualify for federal subsidies to offset the higher premiums. For example, health policy analyst Austin Frakt says, “[M]ost of the cross subsidization is not flowing from younger to older individuals. It’s flowing from the treasury to everyone with low enough incomes.”

This defense doesn’t hold water.

First, only those earning below 400% of the federal poverty level are eligible for subsidies, which means if you are a young single worker who makes more than $45,960 a year, you must pay the higher premiums imposed by Obamacare entirely out of your own pocket. In my view, even one young person fleeced to pay for the older generation’s health care expenses is too many.

Second, the government obtains money for the promised subsidies by confiscating funds from its citizens—in the form of taxes, borrowing, or printing money (this last effectively depletes savings). So when Frakt says the federal government will effectively be subsidizing the coverage of those older, what he means is that everyone (including young people) whose earnings are drained by the government will pay for the coverage of those older. But it’s wrong for the government to force any group of people—be they young, of higher-income, or classified by any other category—to pay the medical bills of others.

(This is cross-posted from Voices for Reason.)

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Almost 50% of all health care dollars in the United States are spent by the government, and the other half is spent by private insurers and individuals on a market that is heavily regulated and controlled by government.

What might medicine look like if government weren’t so deeply entrenched in it? It can be a tough thing to imagine, since government and medicine have been “joined at the hip” (to borrow a recent phrase from Obama) for more than half a century.

There are some Americans, however, who have lived long enough to remember the state of medicine when it was freer. In a recent op-ed in the Wall Street Journal, a doctor describes how his experience in medicine dramatically changed over the course of his medical career–and not for the better. Dr. Marsh says:

When I graduated from medical school in 1962, the profession of medicine was for many graduates an opportunity to provide care–as distinguished from, though aligned with, treatment–and to provide it to individuals, not to populations or governmentally specified groups. Young doctors hoped to establish an independent business, enjoy lifelong intellectual excitement as knowledge and therapies expanded, and have an income sufficient to live decently and support a family. . . .

After eight years of postgraduate study, I opened a solo pediatrics practice in a community of 10,000 souls an hour from Boston. A number of lean years passed before I could build a robust practice. Yet the experience was exactly what I–and I think many of my colleagues–sought: a personal, direct and unimpeded relationship between me and those who chose to become my patients. . . .

I had to give my acute attention to the price of every medical intervention. The costs could have a direct and painful impact on a family’s budget. So I had to know the prices for most of the medications I prescribed and of most of the tests I might order. I learned to play for time by waiting, when it was safe to, before ordering an X-ray or a test—and to substitute less-expensive medications for more costly ones wherever possible. . . .

Then, in the mid-1970s, things changed, and we became enlightened. Third parties, typically the insurance companies, were interpolated between the physician and the patient. Some of the consequences were unfortunate. . . .

Physician compensation is tied to “efficiencies,” which means reducing the outlays and costs to the group (translation: skimp where possible) and thus generating for internal distribution a larger share of the prepaid premiums. . . .

Insurance relationships drove practice relationships.

What Dr. Marsh is referring to is the rise of HMOs in the 1970s, propped up by government subsidy. He describes how these government-bred entities transformed his relationship with patients from one in which their interests were aligned (the better care he took of his patients, the greater rewards he received) to one in which doctors had incentives to sacrifice the quality of patient care to pad their pockets. The whole editorial is worth reading.

Dr. Marsh, a Johns Hopkins-educated physician with a commitment to practice medicine with integrity, held out as long as he could under this new system, ultimately quitting when the government had made it impossible for him to practice medicine the way he knew he should.

Today the kinds of practices Dr. Marsh describes as unthinkable fifty years ago occur on an everyday basis (Obamacare even revamps HMOs—under a new guise, ACOs). Most of us can’t conceive of what medicine minus government intervention would look like. Dr. Marsh describes how the quality of medicine fell as government intruded further in health care. His observations suggest that medicine would look radically better if it were completely unchained from government control, especially considering the remarkable technological advancements made in the last fifty years.

(This is cross-posted from Voices for Reason.)

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I have an op-ed today on Topix.com’s Politix page about Obamacare’s age-related rate restrictions, which require younger people to pay higher insurance premiums in order to subsidize the coverage of those older. I say in the article:

No one, presumably, would be comfortable with the idea of fleecing our children and grandchildren in order to lighten our bills. But supporters of the Affordable Care Act have taken to arguing that forcing young people to subsidize older people isn’t some new consequence of the health law—all insurance, they claim, requires some people to subsidize the expenses of others. Take fire insurance. Ten thousand people might sign up to insure their homes, but only a couple of those homes may end up burning down. The premiums paid by those whose homes did not burn down go toward rebuilding the homes of those whose did.

“That’s how insurance works,” insists health policy analyst Aaron Carroll, who concludes that the health law’s age-related rate restriction is “really not much different than how insurance is supposed to function, by transferring money from the more-healthy to the more-ill.”

But by equating traditional insurance with the health law’s age-related rate restriction, commentators like Carroll ignore a key component of insurance in a market absent government intrusion: the freedom to buy a policy that is priced according to your own risk—a policy that subsidizes no one.

Check out the whole article here. I previously addressed another argument made by proponents of this restriction, here.

(This is cross-posted from Voices for Reason.)

For those who may have missed this recent story:

The nation’s largest movie theater chain has cut the hours of thousands of  employees, saying in a company memo that ObamaCare requirements are to  blame.

Regal Entertainment Group, which operates more than 500 theaters in 38 states,  last month rolled back shifts for non-salaried workers to 30 hours per week,  putting them under the threshold at which employers are required to provide  health insurance.

. . .

One Regal theater manager told FoxNews.com the move has sparked a wave of  resignations from full-time managers who have seen their hours cut by 25 percent  or more.

“In the last couple weeks, managers have been quitting on a daily basis from  various locations to try and find full-time work,” said the manager, who asked  not to be named. “Regal up until now has never restricted anyone to anything  below 40 hours.”

The manager told FoxNews.com ObamaCare has had the unintended consequence of  taking food off his table.

“Mandating businesses to offer health care under threat  of debilitating fines does not fix a problem, it creates one,” he  said. “It fosters a new business culture where 30 hours is now  considered the maximum in order to avoid paying the high costs associated  with this law.

“In a time where 40 hours is just getting us by, putting these kind of  financial pressures on employers is a big step in a direction far beyond the  reach of feasibility for not only the businesses, but for the employees who  rely on their success,” he said.

The Affordable Care Act makes it illegal for most employers to hire a full-time employee without also providing him with health insurance (or paying a hefty fine.) Commanding employers to provide health insurance does not change the fact that it does not make business sense to provide it in some cases. So it should not be surprising that some employers are instead choosing to scale back employee hours.

(This is cross-posted from Voices for Reason.)

Image: Anthony22 at Wikimedia Commons

A recent editorial in the New England Journal of Medicine discusses Vermont’s single-payer health care system and makes the case that other states have a lot to learn from the Green Mountain State. What struck me was what the piece left out of its discussion.

Here are the alleged positives of socialized medicine in Vermont, according to the article:

• “Transparency” and the “engagement of all stakeholders”
• An “independent” five-member board that controls every price, every product and every medical provider
• A state-run health insurance market
• Cost savings

If you needed heart surgery and were considering where to have it, and somebody handed you this list of the benefits of Vermont’s scheme, my guess is you’d toss the list aside and ask, “But are there surgeons in Vermont who have a higher success rate for my particular surgery than those in other states? What are their protocols for reducing medical errors? Are they particularly good at dealing with complications that might arise when I’m on the table?”

There is no mention of the quality of health care in Vermont in the NEJM article, and this article is not an exception—it is all too common for discussions of greater government intrusion in health care to proceed without any consideration for what this will mean for the quality of care available.

The reason there is such little concern with the quality of care is that the leading advocates of government control over the medical field are motivated by egalitarianism—the notion that everybody should have equal health care, even if that care is equally shoddy. To learn about the quality of health care that ultimately results from such an approach, you need only listen to the recent interview I conducted with Sally Pipes, in which she discusses her harrowing firsthand experience of socialized medicine in Canada. (Though Vermont’s scheme is relatively new, there’s reason to expect the same kind of downward trend in quality.)

If advocates of increasing government control were motivated by making possible the highest quality health care, they would talk more about the indisputable fact that freedom and free markets were essential preconditions for the unprecedented human advancements of the last 150 years, including in medicine.

Image: Wikimedia Commons