One of the most interesting questions about the health care overhaul now moving through Congress is how it would affect young adults. That legislation would force most or all Americans to purchase health insurance (an “individual mandate”) and would impose price controls on health insurance (“community rating”) that would limit insurers’ ability to offer lower premiums to low-risk enrollees.
Those provisions would drive premiums down for 55-year-olds but would drive them up for 25-year-olds—who are then implicitly subsidizing older adults. According to the Urban Institute, many young people could see their premiums double, whereas premiums for older adults could be cut in half.
Massachusetts benefits from another type of subsidy that props up its regime of mandates and price controls: large subsidies from the federal government. In contrast, the United States as a whole has no external party it can exploit to subsidize a nationwide Massachusetts-style health care overhaul—unless Congress finances that overhaul through additional deficit spending, which is really just another way of taxing the young to subsidize the old.
The irony is that Barack Obama won the presidency with 66 percent of the vote among adults aged 18 to 29. That’s a larger share than any presidential candidate has won in decades. Yet his health care overhaul could impose its greatest burdens on young adults.