Re: The PPACA - Implementation Phase I
since a construction company still has office staff that may be paying rates that are more geared to construction workers
ah, good, so here at least we do tacitly agree: generally, one very significant component health insurance rates is the prospective risk of the pool of covered insureds. You seem to acknowledge that health insurance premiums in an employer-sponsored plan will indeed vary in part based on the risk profile of the employees.
you are complaining that young people get screwed by Obamacare.
No, I'm not. That's the second or third time now that you've attributed a moral component to my comments, which have been limited in this context solely to practical concerns. I never used the term "screwed." To say that young people are over-paying relative to their risk profile is merely a statement of fact, one which you seem to tacitly acknowledge as well. Your emotion-laden terms seem to indicate that you have inferred that I somehow think that PPACA has deliberately set out to do young people a disservice, and that is just not correct.
Let's walk together for a moment, to translate the conversation into practical terms without value judgments. You are saying that one way to set insurance rates is to have one pool of people from age 18 through 64 (let's assume children under 18 are already covered in states' CHIPs).
No argument here. One could indeed set rates based on that risk pool.
I might reply that it seems preferable to me to have two sets of rates, one for smokers and one for non-smokers. Smokers have far higher risks of cancer and lung disease than non-smokers, and smoking is a voluntary choice. Having dual rates in practice would have an ancillary benefit of providing another financial incentive for smokers to quit, thereby reducing their usage of the healthcare system, reducing costs for everyone. I just don't think it is "fair" to non-smokers to pay extra to cover the extra costs of treatment that smokers will incur. Now, if we do NOT have separate rates for smokers and non-smokers, would you say that non-smokers are "getting screwed"? or would you merely note that smokers are paying more than their risk profile would indicate, so that smokers can thereby pay less than their risk profile would indicate?
There are two things to note (facts only) about the way PPACA uses one risk pool for people 18 - 64:
1) they give people the choice to opt out. This makes pricing far more unstable and volatile. Health insurance pricing generally occurs one year in arrears (or a rolling average of 3 or 5 prior years). This year's rates are based on anticipated experience, and much of that anticipated experience is an extrapolation from existing experience, perhaps adjusted or tweaked by the pricing actuaries. However, in the case of PPACA, it's all brand new: there is no prior experience from which to extrapolate. Giving people the choice to opt out adds another huge component of uncertainty and volatility to the situation.
2) the administration has been all over the news telling people how important it is to get young people to sign up. It has been the administration, not me, telling people they need lots of younger participants to enroll so that their premiums will help cover expenses expected to be incurred by older people that exceed premiums expected to be paid by older people. This is all by their design, it is all one risk pool, remember? It is very much analogous to the smoker / non-smoker situation.
I'm saying this is a very poor design. Smoker / non-smoker rate differential and age banding would have been a much, much better implementation.
