Jenkins: The Young Won't Buy ObamaCare
It makes scant financial sense for them to subsidize others' care.
By HOLMAN W. JENKINS, JR.
Media outlets lately have emphasized the challenge of enticing healthy young adults to sign up for ObamaCare, "exactly the type of person insurance plans, states and the federal government are counting on to make health reform work," as the L.A. Times put it. These pieces are useful as far as they go, but miss a key point that Supreme Court Justice Samuel Alito managed to convey in many fewer words during last year's Supreme Court argument on ObamaCare.
Mr. Alito pointed out that young, healthy adults today spend an average of $854 a year on health care. ObamaCare would require them to buy insurance policies expected to cost roughly $5,800. The law, then, isn't just asking them to pay for "the services that they are going to consume," he added. "The mandate is forcing these people to provide a huge subsidy to the insurance companies . . . to subsidize services that will be received by somebody else."
Since he puts it that way, why would they sign up for ObamaCare, especially since the alleged penalties will be negligible and likely unenforced?
Journalism celebrates the "five Ws" but a secret of our profession is that many of us disdain the fifth W-"why"-as if accurate analysis is somehow woolly and inferior to accurate transcription of simple facts like "who," "what," "when" and "where."
Here's another example. For 30 years, journalists have been "investigating" hospital pricing, which is neither competitive nor closely related to cost, invariably throwing up their hands and saying government must fix matters. Yet any reasoned analysis shows that government policy is why we have such a byzantine payment system in the first place, in which an ever-inflating health-care bill is allocated among "payer" groups via opaque political bargaining.
Why isn't the same mess seen in other realms of the economy? In the automobile market, dealers publish prices on their websites and in ads that are always lower than the sticker prices. Why?
Independent websites like Edmunds.com, AutoTrader.com and Kelley Blue Book publish detailed pricing information for consumers and do so for free. Why?
The answer is obvious. Consumers want such information and businesses see opportunity in providing it, even for free, in order to attract eyeballs for advertising.
Such information doesn't exist in health care because consumers don't demand it, because somebody else is almost always paying for our health care. Those of us who aren't subsidized directly by Medicaid, Medicare and the Veterans Administration are subsidized through the tax code to channel all our aches and pains through a third-party payment mill, disguised as employer-provided "insurance."
Not being able to analyze "why" also leads to all kinds of anomalous conclusions.
The uninsured are painted as the payer group getting the worst deal from the health-care system since they don't enjoy insurer discounts. But judging by the 6% of hospital costs written off as uncollectable, the uninsured are actually getting the best deal (in a sense). A 2011 government study found that even relatively affluent families pay just 37% of their hospital bills in full.
Medicare is portrayed as getting the best deal from the system because Medicare pays less per service. But remember how the system works. Who's to say Medicare doesn't pay less per procedure because it's being billed for many more procedures, because that's how providers are allowed to maximize their revenues from the payer known as Medicare?
In fact, plenty of evidence suggests this is exactly how Medicare operates. And Congress understands as much, hence the 25% cut in physician reimbursements it keeps threatening to impose is informed partly by expectations that physicians could maintain their incomes by charging for more services.
The media's refusal to accumulate any wisdom on the "whys" of our health-care system is also behind the willingness of so many to credit a recent moderation in health-care spending to ObamaCare, though that moderation began before ObamaCare was enacted.
The spending moderation is actually not dissimilar to that seen during the heyday of managed care in the 1990s and again during the 2000s as employers rolled out sharply higher deductibles, co-pays and health savings accounts. The moderation is not dissimilar to that seen in every economic downturn when companies chuck insured workers off their payrolls and fellow workers curb their health spending out of fear of losing their jobs.
Employers are stuck constantly trying to combat the inflationary forces that government policy fosters. That's our best explanation of why health-care inflation waxes and wanes, though never to the point of falling in real terms. And it's probably true now too.
If this big picture is news to you, blame the disrespect in which the fifth W is held by the media profession.