Thursday, October 17, 2013
ACA: The Least Wealthy Group, The Young, Subsidize the More Wealthy Group, The Old.
“Experts say the administration has until mid-November to iron out the problems or risk jeopardizing its goal of signing up 7 million people in the first year of the Obamacare marketplaces. The number includes 2.7 million healthy young adults whose participation will help offset the higher cost of insuring sicker and older beneficiaries.” - Obamacare site improves, but new problems emerge, msnnews, 10/16/2013 (1)
“The number includes 2.7 million healthy young adults whose participation will help offset the higher cost of insuring sicker and older beneficiaries.”
Certain political elements make a concerted effort to court young people. This same element, in the main, wants to charge the young to cross subsidize the old in regards to health insurance. Cross subsidization is by no means a new tactic e.g. Social Security and Medicare at this juncture are basically pay-as-you-go with the young paying for the old. But the new tactic is: The blatant advertising of the cross subsidy stratagem.
Hence certain political elements that court younger people with promises of political solutions to economic problems i.e. social justice are advocating the younger subsidize the older. Why wouldn’t each age group merely pay for the risk they themselves represent? Why would the least wealthy group, the young, pay for, in the main, the more wealthy older group? Reverse social justice?
Beyond social justice being a mirage [F.A. Hayek], younger people might want to examine Director’s Law:
Director's law states that the bulk of public programs are designed primarily to benefit the middle classes but are financed by taxes paid primarily by the upper and lower classes. The empirically derived law was first proposed by economist Aaron Director.
The philosophy of Director's law is that, based on the size of its population and its aggregate wealth, the middle class will always be the dominant interest group in a modern democracy. As such, it will use its influence to maximize the state benefits it receives and minimize the portion of costs it bears. (2) (3)
Moreover, a media barrage has begun aimed at the young with the by-line of: you must purchase as it’s the “law”. Is it "law" or is merely manmade legislation created by the stroke of a pen and can be voided by a stroke of a pen? Legislation is top-down edict of the few whereas law is emergent order of the many which emerges over long periods of time. Adding the label of "law" to manmade/mandated legislation of the few, is merely a political attempt to give the weight of law to legislation. (4)
Maybe the young, those that feel they are being railroaded, should consider reading Thomas Lambert's, law professor at the University of Missouri, essay entitled How the Supreme Court Doomed the ACA to Failure. Why would the young want to read such essay? The essay includes the quintessential ACA work around of when to pay the tax [penalty] and when to buy the insurance. Lambert offers charts, examples and includes a to-the-point discussion.
The link to Lambert’s essay appears below:
(2) Director’s Law
(3) (4) Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice, F.A. Hayek