Dear 18 – 29’s

by David McNeil, M.D

An Open Letter to a “Demographic”

November 27, 2009
Dear 18 – 29 Year Olds,
I have never written an entire cohort before. Although I know you are not all alike, apparently you are considered to be a pretty homogenous bunch by actuaries, census-takers, marketers, and the people who print all those warranty forms. (Not to mention pollsters, and because of that you have been making lots of headlines regarding health care reform.)

Most follow one of two themes, here exemplified:

* Theme A) “Healthcare reform’s biggest fans: young adults”
* Theme B) “Health care reform bills fleece young”

Now this could be a generation gap thing that I “just don’t understand”, but I sense incongruity between these two. Generalities like “idealism” and “disinterest in current events” spring to mind. But generalities can be unkind.

A few days ago pollster Scott Rasmussen reported that “Theme A” remains true: 18-29’s are now the only group with a majority favoring the current proposals. Every other group is opposed.

A colleague told me your majority dramatically reverses itself when specifics are made known. He did not say what information turns the tide, but in various of the “Theme B” articles, I have found a lot that might.

Let’s first review the status quo:

Many in your “demographic” are uninsured or underinsured. According to HHS, “young adults aged 19 to 29 make up nearly one-third of the uninsured population and have the highest uninsured rate of any age cohort. Thirty percent of young adults do not have health insurance, compared with 17 percent of older adults (those aged 30-64).” Many of you choose not to pay for health care insurance because you are young and healthy. Others work only part time or for small businesses that do not offer coverage.

There are solutions here, many of which are underutilized. They include student policies, coverage through alumni associations, and staying on your parents’ plans. Catastrophic plans cost as little as $40 a month. Health Savings Accounts offer broader coverage, also at low rates. For those with pre-existing conditions, every state sponsors a risk pool offering affordable individual plans. (Search under “[your state] department of insurance”.) Medicare is available for those of you with ongoing disability, and Medicaid for those who are poor.

How will things change under the proposed reforms?

Two of the most popular solutions mentioned above, catastrophic coverage and Health Savings Accounts, are simply outlawed in the new bills. They don’t satisfy the new definitions of “qualified” coverage.

Individuals 18 and older are required to have insurance or face a stiff tax: $750 for those earning as little as $10,831 a year.

The reforms also require that most employers offer insurance, so if you work for an employer offering coverage, the individual tax can be avoided. Numerous studies show this employer mandate will reduce jobs, wages, and economic growth. Small businesses will be hardest hit, with the greatest impact upon your cohort. An added income tax on individuals owning small businesses that gross over $500K will further decrease their ability to hire. Because the Senate bill also mandates employer coverage of part-time positions, fewer will be available, along with their opportunities for you to work your way through school or earn more from a second job.

Many of you are new hires on the lower rungs of the pay ladder. If you have excellent health coverage, you will likely have to give it up in favor of a less expensive plan, due to a 40% tax proposed by the Senate on “high value plans”. That means you will have to stretch your wages further and pay more for you health care.

Eliminating pre-existing exclusions and caps on benefits will force higher premiums generally, unfairly so to the young and healthy.

Further, Congress is proposing changes to specifically and disproportionately increase your premiums: Currently, employers spend approximately ten times to insure their older workers what they spend on you. The Senate’s bill requires reduction of this ratio to 3:1. The House bill reduces it further, to 2:1. Needless to say, these ratios won’t be achieved by lowering premiums for the elderly!

Additional premium increase will come from taxes on medical devices, products, and services.

Can the increased premiums be avoided by enrolling in the “Public Option”? The Congressional Budget Office says that premiums for the “Public Option” will be higher than the average private insurance premium.

These health care bills make things worse for you, now and into the future.

They will increase your health care costs, force you to have insurance with coverage you may neither need nor want, and diminish your employment and economic opportunities. They also require you to transfer more of your income to your elders (us), to help pay for our health care. These bills will result in more people having insurance, but at great cost; there are alternatives that are much less expensive, and you will still be on the hook for the millions these proposals are predicted to leave out.

Finally, these bills are not “deficit neutral”. Since 1994, CBO health care projections have been referred to as “incalculably inaccurate” and “probably underestimated”. Others have said the 10-year cost of the proposals will be $3 trillion or more.

Thus their worst effect on you is invisible. You are already “mandated” to support us for our Social Security, our Medicare, and the recent spending for stimulus, bailouts, etc.

These bills will increase the long-term debt for which will pay with diminished economic achievement and poorer quality of life for the rest of your lives.

Sincerely,

David McNeil, M.D.