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Author Topic: A well-said defense of Obamacare  (Read 1466 times)
Less-Progressivism, More Realism
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« on: June 30, 2012, 06:37:10 pm »
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"With regards to my health care plan, let me describe what is the ultimate conservative approach. In this country, you have today about 47 million people that don’t have health insurance. We went out and tried to find out why they don’t. We found out that about half of them could afford to buy insurance if it were reasonably priced. They could afford to buy it, but they weren’t buying it. it? If we get sick, we can go to the hospital and get care for free.“ And we said: what? If somebody could afford insurance, they should either buy the insurance or pay their own way. They don’t have to buy insurance if they don’t want to, but pay their own way. But they shouldn’t be allowed to just show up at the hospital and say, somebody else should pay for me. So we said: No more free riders. It was like bringing “workfare” to welfare. We said: If you can afford insurance, then either have the insurance or get a health savings account. Pay your own way, but no more free ride. That was what the mandate did."

http://www.issues2000.org/2012/Mitt_Romney_Health_Care.htm

Solid stuff. This guy should be an adviser to Obama's campaign.
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Torie
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« Reply #1 on: June 30, 2012, 06:42:31 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.
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pbrower2a
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« Reply #2 on: June 30, 2012, 07:29:54 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

All insurance is subsidy by the lucky of the unlucky. Because of Medicare the young are subsidizing those in the latter years of middle age. 
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Torie
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« Reply #3 on: June 30, 2012, 07:43:25 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

All insurance is subsidy by the lucky of the unlucky. Because of Medicare the young are subsidizing those in the latter years of middle age. 

No insurance is about being unlucky. But when you are forced to pay more than necessary to insure your unluckiness, because you are forced to pay more given your age and level of health so that someone else pays less (to wit, pay more than necessary to deal with the free rider problem), that is a subsidy - not insurance. The two concepts must not be conflated in order to make an intelligent policy choice here.  Generally it is preferable to finance subsidies on a means tested basis, but for some reason the Left just doesn't it get it on this one.  They want to slam young folks, not rich folks.
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« Reply #4 on: June 30, 2012, 07:58:50 pm »
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Torie, the base of the plan is than young people will eventually old and get sick.
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anvi
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« Reply #5 on: June 30, 2012, 08:28:48 pm »
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Ok, so what about the adjustments Australia made to its community rating policies some years back, known as LHC (Lifetime Health Cover)?  They found that community rating was leading to an adverse selection problem for the young, leading them to rely only on the national policy and not purchase supplemental private plans.  So, they adopted additional reforms that modified the community rating rules to allow individual companies to sell policies whose premiums were adjusted for age entry, allowed young adults to buy policies that insured some things and excluded others, allowed them to choose between different deductible amounts, and, as I understand it, in some cases adjustment of pooling and policy prices for older enrollees as well.  They allowed, that is, what is apparently called "implicit rating" within the larger structure of a community rating framework.  The product differentiation and its effect on premiums seems to have led to a dramatic increase in the number of young people enrolled in private plans in Australia.  The author of the linked paper that presents this analysis notes toward the end (p. 607) that a few U.S. studies have also found that community rating doesn't have as much effect on numbers of people insured in states that have it, but has more an effect on policy sorting.

http://www.genevaassociation.org/PDF/Geneva_papers_on_Risk_and_Insurance/GA2008_GP33(4)_Buchmueller.pdf
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TheDeadFlagBlues
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« Reply #6 on: June 30, 2012, 08:29:14 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

The base of any sort of social policy is the strong subsidizing the weak. The wealthy subsidize the poor, the old subsidize the young (whether they be adolescents, children or young adults), those who drive cars subsidize those who ride public transit and civilians subsidize the military. It's called living in a society. Your canard is growing really old and I advise you to find a new excuse to oppose this policy.
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« Reply #7 on: June 30, 2012, 09:38:42 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

And when I'm old, the young will pay for me.  And when they're old, the new young will pay for them.  It's the fairest way to do it.
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anvi
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« Reply #8 on: June 30, 2012, 09:57:26 pm »
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I read some studies of this online this evening, and I do think, if we just stick with pure community rating, the cross-subsidy issue could indeed be quite burdensome on the young.  I agree in principle with the cycle of life idea.  But if the young can't afford it, it's hard to observe the principle.  I think we may either have to make modifications to the community rating policies akin in some way to how Australia handled it, or just go with means-tested subsidization, which is more straightforward and arguably fairer.  I'm glad the mandate held, but that doesn't solve all the policy problems.
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« Reply #9 on: June 30, 2012, 09:59:49 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

And when I'm old, the young will pay for me.  And when they're old, the new young will pay for them.  It's the fairest way to do it.
A modest proposal which might seem fairer to some conservatives: if you're one of those young free riders, who can afford health care, but chooses not to buy it, then, if you get catastrophically ill -- cancer, car accident, whatever -- you should be denied treatment, and left to die. We'd have to release doctors from the Hippocratic Oath, mind you, but anything to give those young people freedom of choice!
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IDS Ex-Speaker Ben Kenobi
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« Reply #10 on: July 01, 2012, 08:21:02 am »
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Which is why the plan covers elective surgery? It's not health insurance, it's "pay for my free **** so I don't have to pay for it.

We'd be better off giving out gas cards to everyone. Then they don't have to worry about how they are gonna get to the pharmacy.
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« Reply #11 on: July 01, 2012, 10:05:29 am »
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So it makes sense for the young to subsidize someone else, when available cash is really tight, in exchange for a subsidy when they are older and have much more cash lying around, on average? No, I am going to stand by my position on this one, thanks.

In any event, the system is headed for collapse, because the young will just pay the penalty if they need care, which will cost them a lot less, and that assumes the penalty is ever paid, and the IRS enforcement mechanisms to do that seem close to nil. All the IRS can do is offset the penalty against any tax refund that might otherwise be owing per my readings on this matter. So the whole scheme should fall apart in a hurry. You just wait and watch.
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ajb
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« Reply #12 on: July 01, 2012, 10:08:07 am »
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So it makes sense for the young to subsidize someone else, when available cash is really tight, in exchange for a subsidy when they are older and have much more cash lying around, on average? No, I am going to stand by my position on this one, thanks.

In any event, the system is headed for collapse, because the young will just pay the penalty if they need care, which will cost them a lot less, and that assumes the penalty is ever paid, and the IRS enforcement mechanisms to do that seem close to nil. All the IRS can do is offset the penalty against any tax refund that might otherwise be owing per my readings on this matter. So the whole scheme should fall apart in a hurry. You just wait and watch.

That's why I think you should be in favor of letting the young and deliberately uninsured die when they get sick.
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Torie
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« Reply #13 on: July 01, 2012, 10:15:19 am »
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So it makes sense for the young to subsidize someone else, when available cash is really tight, in exchange for a subsidy when they are older and have much more cash lying around, on average? No, I am going to stand by my position on this one, thanks.

In any event, the system is headed for collapse, because the young will just pay the penalty if they need care, which will cost them a lot less, and that assumes the penalty is ever paid, and the IRS enforcement mechanisms to do that seem close to nil. All the IRS can do is offset the penalty against any tax refund that might otherwise be owing per my readings on this matter. So the whole scheme should fall apart in a hurry. You just wait and watch.

That's why I think you should be in favor of letting the young and deliberately uninsured die when they get sick.

No, I need to keep the young alive to pay for my social security. So I want to encourage them to be insured by not having to cross subsidize others.
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« Reply #14 on: July 01, 2012, 10:23:18 am »
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The worst cross-subsidy is how public universities were nearly free for the boomers but kids these days have to rack up huge debts to pay for the same education because the Boomers won't support the kinds of taxes their parents paid. That's a more pernicious cross-subsidy.
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ajb
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« Reply #15 on: July 01, 2012, 10:24:41 am »
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So it makes sense for the young to subsidize someone else, when available cash is really tight, in exchange for a subsidy when they are older and have much more cash lying around, on average? No, I am going to stand by my position on this one, thanks.

In any event, the system is headed for collapse, because the young will just pay the penalty if they need care, which will cost them a lot less, and that assumes the penalty is ever paid, and the IRS enforcement mechanisms to do that seem close to nil. All the IRS can do is offset the penalty against any tax refund that might otherwise be owing per my readings on this matter. So the whole scheme should fall apart in a hurry. You just wait and watch.

That's why I think you should be in favor of letting the young and deliberately uninsured die when they get sick.

No, I need to keep the young alive to pay for my social security. So I want to encourage them to be insured by not having to cross subsidize others.
But presumably you need to keep the middle aged alive to pay for your social security, too. And shifting costs away from one group does mean shifting them on to another.  
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Torie
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« Reply #16 on: July 01, 2012, 11:31:09 am »
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The worst cross-subsidy is how public universities were nearly free for the boomers but kids these days have to rack up huge debts to pay for the same education because the Boomers won't support the kinds of taxes their parents paid. That's a more pernicious cross-subsidy.

The parents didn't pay any more in taxes, and probably less overall. Those high marginal rates were paid by almost nobody. The cost of higher education is however a scandal. Something is terribly dysfunctional with that market. I (well my parents) paid about $2000 a year in tuition for eight years from 1969-1977 (college, business school and law school, all at elite institutions), maybe about $10,000 now in inflated dollars. But the cost of tuition is now around $40,000, which means a quadrupling in tuition costs in real inflation adjusted dollars.

Something is rotten in Denmark. Probably the government pumping money in, had something to do with it, but it would be great if someone directed me to some intelligent paper on the subject, that has been peer reviewed and sustained that review.
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ajb
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« Reply #17 on: July 01, 2012, 11:38:12 am »
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The worst cross-subsidy is how public universities were nearly free for the boomers but kids these days have to rack up huge debts to pay for the same education because the Boomers won't support the kinds of taxes their parents paid. That's a more pernicious cross-subsidy.

The parents didn't pay any more in taxes, and probably less overall. Those high marginal rates were paid by almost nobody. The cost of higher education is however a scandal. Something is terribly dysfunctional with that market. I (well my parents) paid about $2000 a year in tuition for eight years from 1969-1977 (college, business school and law school, all at elite institutions), maybe about $10,000 now in inflated dollars. But the cost of tuition is now around $40,000, which means a quadrupling in tuition costs in real inflation adjusted dollars.

Something is rotten in Denmark. Probably the government pumping money in, had something to do with it, but it would be great if someone directed me to some intelligent paper on the subject, that has been peer reviewed and sustained that review.
These days it has much more to do with the government money being yanked out. For all practical purposes, the United States no longer has public universities, at least at the flagship state level.
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« Reply #18 on: July 01, 2012, 11:47:14 am »
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More fully, there have been a couple of financing models for research universities that have proved sustainable. One is the European model (formerly roughly similar to the American public university model), where most or all of the cost of the university is paid for by the government out of tax revenue. Taxpayers subsidize university education whether they get it or not, but since there's a strong correlation between university attendance and income, it roughly evens out.
The other model is the American private research university, where tuition needs to be extremely high, not only to cover the costs of running the institution, but also to subsidize the talented kids who could never afford full fare. That's how somewhere like Harvard works -- rich parents cheerfully pay $50 000 a year, but half the students receive some kind of financial aid, such that families making less than about $120 000 a year pay little or nothing.
For that model to work, of course, you need lots of rich parents who are suckers enough to pay that much. If you don't have enough of them, or if you set tuition too low, then there isn't enough money left over to subsidize "poor" kids. Either way, rich people subsidize research universities, whether through their taxes, or through paying too much for their kids' tuition.  Conservatives might prefer the latter model, as one that preserves consumer choice, but of course it builds in a number of inequities and inefficiencies as well.
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WhyteRain
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« Reply #19 on: July 01, 2012, 11:50:26 am »
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"With regards to my health care plan, let me describe what is the ultimate conservative approach. In this country, you have today about 47 million people that don’t have health insurance. We went out and tried to find out why they don’t. We found out that about half of them could afford to buy insurance if it were reasonably priced. They could afford to buy it, but they weren’t buying it. it? If we get sick, we can go to the hospital and get care for free.“ And we said: what? If somebody could afford insurance, they should either buy the insurance or pay their own way. They don’t have to buy insurance if they don’t want to, but pay their own way. But they shouldn’t be allowed to just show up at the hospital and say, somebody else should pay for me. So we said: No more free riders. It was like bringing “workfare” to welfare. We said: If you can afford insurance, then either have the insurance or get a health savings account. Pay your own way, but no more free ride. That was what the mandate did."

http://www.issues2000.org/2012/Mitt_Romney_Health_Care.htm

Solid stuff. This guy should be an adviser to Obama's campaign.

Yup.  I've always said that Romney was the worst possible nominee for the GOP to run against Obama.

Everyone should be able to see now why the MSM-Obama SuperPAC made sure to pound into dust every "conservative alternative" to Romney, giving him a clear path to the nomination.
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WhyteRain
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« Reply #20 on: July 01, 2012, 11:54:23 am »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

And when I'm old, the young will pay for me.  And when they're old, the new young will pay for them.  It's the fairest way to do it.

And the middlemen in the government will become superrich.

Or did you think it's natural that D.C. is now America's richest metropolis?
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WhyteRain
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« Reply #21 on: July 01, 2012, 11:57:59 am »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

And when I'm old, the young will pay for me.  And when they're old, the new young will pay for them.  It's the fairest way to do it.
A modest proposal which might seem fairer to some conservatives: if you're one of those young free riders, who can afford health care, but chooses not to buy it, then, if you get catastrophically ill -- cancer, car accident, whatever -- you should be denied treatment, and left to die.

That is how it would work if we were all notoriously stingy progressives. 

The conservative way is that we would all voluntarily donate to save the deserving poor patient in such a situation.

Progressives who insanely think that without government-forced healthcare lots of people will be "left to die" need to explain why that didn't happen before government-forced healthcare.
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anvi
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« Reply #22 on: July 01, 2012, 12:02:21 pm »
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Something is rotten in Denmark. Probably the government pumping money in, had something to do with it, but it would be great if someone directed me to some intelligent paper on the subject, that has been peer reviewed and sustained that review.

Not a peer-reviewed paper (I'd have to do some digging for that) and this is a bit dated of a FinAid research report.  But despite the ten-year old numbers, I think the identification and breakdown of cost-drivers is still basically good.

http://www.finaid.org/calculators/tuitionanalysis.pdf
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Torie
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« Reply #23 on: July 01, 2012, 12:05:40 pm »
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More fully, there have been a couple of financing models for research universities that have proved sustainable. One is the European model (formerly roughly similar to the American public university model), where most or all of the cost of the university is paid for by the government out of tax revenue. Taxpayers subsidize university education whether they get it or not, but since there's a strong correlation between university attendance and income, it roughly evens out.
The other model is the American private research university, where tuition needs to be extremely high, not only to cover the costs of running the institution, but also to subsidize the talented kids who could never afford full fare. That's how somewhere like Harvard works -- rich parents cheerfully pay $50 000 a year, but half the students receive some kind of financial aid, such that families making less than about $120 000 a year pay little or nothing.
For that model to work, of course, you need lots of rich parents who are suckers enough to pay that much. If you don't have enough of them, or if you set tuition too low, then there isn't enough money left over to subsidize "poor" kids. Either way, rich people subsidize research universities, whether through their taxes, or through paying too much for their kids' tuition.  Conservatives might prefer the latter model, as one that preserves consumer choice, but of course it builds in a number of inequities and inefficiencies as well.

There was financial aid, and grants back in my day too. I am not persuaded that the bulk of the massive tuition increases can be attributable to a huge ramp up in cross subsidies, with the rich paying more, and the poor paying less, with more poors in the system. That is probably part of it however, I just don't think it is the major part.
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ajb
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« Reply #24 on: July 01, 2012, 12:11:25 pm »
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It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

And when I'm old, the young will pay for me.  And when they're old, the new young will pay for them.  It's the fairest way to do it.
A modest proposal which might seem fairer to some conservatives: if you're one of those young free riders, who can afford health care, but chooses not to buy it, then, if you get catastrophically ill -- cancer, car accident, whatever -- you should be denied treatment, and left to die.

That is how it would work if we were all notoriously stingy progressives. 

The conservative way is that we would all voluntarily donate to save the deserving poor patient in such a situation.

Progressives who insanely think that without government-forced healthcare lots of people will be "left to die" need to explain why that didn't happen before government-forced healthcare.

As you probably already noticed, I'm not saying that anybody would be left to die without the ACA. I'm saying that there are several ways of dealing with the free-rider problem of young people who can afford health insurance, but choose not to purchase it. One (my preferred option) would be Medicare for everyone. One (which the ACA offers) would be to penalize them, ofsetting the financial burden these people willingly inflict on the rest of us, and incentivizing them to buy insurance. A third way would be to let people live, or die, with the consequences of their actions. Our current solution is of course charity, which, as so often, actually amounts to tax dollars through the back door.

The point is that young people who can afford health insurance, but choose not to purchase it, can celebrate their freedom of choice all they like, but the reality is that they're imposing considerable hidden costs on the rest of us, who pay taxes and have health insurance.
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