Wednesday, October 14, 2009

"HI Mom! Send health insurance!" 

A couple of items in this Huffington Post piece are astonishing. One, an astonishing admission. See if you see it without my italics.
A new provision being rolled into the unified House health care bill would allow young adults to stay on their parents' health care plans until they turn 27, House Speaker Nancy Pelosi told reporters Tuesday.

Flanked by young adults from 30 states, Pelosi and Rep. Chris Van Hollen (D-Md.) joined the bill's sponsor, first-term Rep. Kathy Dahlkemper (D-Penn.), to support extending eligibility for a parent's insurance plan well past graduation from high school or college. Given that nearly one-third of America's uninsured are aged 19 to 29, Pelosi said the bill would both expand coverage and reduce the amount of subsidies the government would need to provide for coverage.

"Young adults are the most uninsured group in the country. They often lose coverage at age 19 when they graduate from high school or a few years later when they graduate from college. Once they enter the workforce, they face new obstacles to getting insurance," Pelosi said. "Now with this legislation that takes them to their 27th birthday, we take them a long way down the path of some independence, some liberation to follow their aspirations right out of school.
I'll wait: Did you see it?

Waiting...

OK, here it is with the italics:
A new provision being rolled into the unified House health care bill would allow young adults to stay on their parents' health care plans until they turn 27, House Speaker Nancy Pelosi told reporters Tuesday.

Flanked by young adults from 30 states, Pelosi and Rep. Chris Van Hollen (D-Md.) joined the bill's sponsor, first-term Rep. Kathy Dahlkemper (D-Penn.), to support extending eligibility for a parent's insurance plan well past graduation from high school or college. Given that nearly one-third of America's uninsured are aged 19 to 29, Pelosi said the bill would both expand coverage and reduce the amount of subsidies the government would need to provide for coverage.

"Young adults are the most uninsured group in the country. They often lose coverage at age 19 when they graduate from high school or a few years later when they graduate from college. Once they enter the workforce, they face new obstacles to getting insurance," Pelosi said. "Now with this legislation that takes them to their 27th birthday, we take them a long way down the path of some independence, some liberation to follow their aspirations right out of school.
So one third of the uninsured (I assume that means a third of the 30 million out of the 307 million) are between 19 and 29, youth that don't really need much insurance. As Robert Reich said in his talk at Stanford in 2007, an honest president would say
we have the only health-care system in the world that is designed to avoid sick people. [laughter] That's true, and what I'm going to do is I am going to try to reorganize it to be more amenable to treating sick people. But that means you--particularly you young people, particularly you young, healthy people--you're going to have to pay more.
But of course the young both don't have much money, and they voted overwhelmingly for Obama. So we make the cool kids' parents pay, or even better we make their parents' employers pay more. It's not clear whether covering one's child would be under the individual mandate or not. My son is 25 and works two 30-hour-a-week jobs in the restaurant industry, neither of which provide health insurance. If he remains uncovered under the individual mandate, who gets fined -- him or me? (As the HuffPo article states, we don't know if the coverage will have price caps on it, so I won't go into that additional problem.)

Second, since most health care has restrictions at the state border, what does this do to labor mobility? Pelosi acknowledges that health insurance for the young is more difficult, because the per person cost of health insurance creates a bigger wedge for lower-productivity workers. (See Wikipedia on tax wedges -- a mandate for health insurance is in essence a wedge.) So these 20-somethings are now put on their parents' plans, which are designed for families in the state where Mom and/or Dad work. Suppose Missy wants to work in New York and leave her parents in Missouri. Her NY job doesn't have health coverage. How do Mom and Dad cover her?

This really is nonsense.

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