April 12, 2010
By Michael Franc
Will young adults rebel over health care, not to mention the other costs that will weigh down their balance sheets?
What happens when the Millennial Generation — members of which are between the ages of 18 and 29 — sees its high expectations for “change” dashed? The new health-reform law may let us find out.
The Millennials received a jolt last week, and it wasn’t from their morning cups of mocha latté. It came from an Associated Press headline, “Health Premiums Could Rise 17 Pct for Young Adults” The story began:
Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans — a shift expected to raise insurance premiums for young people when the plan takes full effect.Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press.
Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans — a shift expected to raise insurance premiums for young people when the plan takes full effect.
Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press.
Why? The new law caps how much insurance companies can charge older, less healthy individuals, the most expensive group to insure. Specifically, the premium for an unhealthy 55-year-old can be no more than three times the premium charged to even the healthiest 20-year-old. In a free insurance market, that ratio would be more like seven-to-one. To recoup their losses on older clients, insurers will have to overcharge their younger policyholders by 17 percent, according to the AP-commissioned study and by as much as 50 percent according to other credible studies.“The higher costs,” the AP noted, “will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years.”The only solace the new law has to offer these twentysomethings is dependency. One provision allows Millennials to stay on their parents’ health-insurance plans to age 26. Another would let low-income single adults become dependent on Medicaid, a poorly performing welfare program that rations care.
As Americans find out what it really does, they’ll be really unhappy. . . . The first really unhappy people will be the 19 million students who, after July 1, will have no choice but to go to federal call centers to get their student loans. They’ll become even unhappier when they find out that the government is charging 2.8 percent to borrow the money and 6.8 percent to lend it to the students, and spending the difference on the new health-care bill and other programs. In other words, the government will be overcharging 19 million students.
The overcharge is “significant,” Alexander noted, running between $1,700 and $1,800 on the average $25,000 student loan.So, not only will the new insurance rules shift the cost of health care from the most pampered generation in human history to the most fiscally burdened one, but today’s college kids will pay more for their student loans.Will our Millennial friends rebel over this, not to mention the other costs that will weigh down their balance sheets? After all, paying a few hundred dollars more each year for health coverage or student loans, while no small burden, pales in comparison to what they’ll have to cough up to cover Medicare, Social Security, and nursing-home stays for the Boomers.Millennial Generation voters surely rank among President Obama’s most loyal supporters. Exit polls indicate that they swooned for The One by a more than two-to-one margin (66 percent to 32 percent) on Election Day 2008. Indeed, the alliance between Obama and Millennials may be a match made in heaven. The Pew Research Center’s ideological profile of Millennials, for example, places them decidedly to the left of older Americans on social issues and finds they are more forgiving of governmental activism and less supportive of an assertive national-security policy than are older voters.Millenials remain largely in Obama’s corner to this day, but their fervor is waning. Pew found that, over the course of 2009, Millennials grew increasingly disenchanted with both the president and his party. The president’s approval rating among young voters fell from its post-inaugural high of 73 percent to 57 percent in February. The Democrats’ partisan advantage among Millennials narrowed as well, moving from 60 percent–31 percent to 54 percent–40 percent over the last year. Their positive assessment of Obama’s handling of health care and the economy over the last year tumbled even more dramatically, by 17 and 22 percentage points respectively.
And the first Gallup survey conducted after the new health-care law took effect found respectable, but less than overwhelming, support for Obama’s signature legislative achievement among those between 18 and 34 years old. Little more than half (54 percent) viewed the new law as a “good thing.” A significant minority (45 percent) dissented.So, will younger voters come to resent all these new burdens Obama and his allies are placing on their shoulders? And, if so, will they make their views known in November’s elections?
Answers to those questions may be found in polls conducted by Scott Rasmussen. Unlike other pollsters, Rasmussen surveys “likely voters” rather than “adults” or “registered voters.” The methodology offers the best possible insight into the attitudes of those who will actually cast their ballots on Election Day.Rasmussen’s poll results suggest that the Millennials who plan to vote in November are a breed apart from the broader sample surveyed by Pew. In fact, they seem to possess the sort of ideological instincts that will facilitate a rightward shift in their political behavior. A close reading suggests that if the Millennium Generation is to move to the right, it will be because they have come to appreciate the unique intergenerational fiscal burden being foisted on them.A couple of examples: Among Millennials who say they are very likely to vote, two-thirds believe spending and tax increases hurt the economy. Even higher proportions look kindly on tax and spending cuts, saying they will foster economic growth. Little wonder that, by a resounding 78 percent–17 percent margin, they prefer a government that provides fewer services and taxes us less to one that taxes us more and provides more services. Ask them to assess the merits of offshore drilling for oil and natural gas, and they turn out to be even more supportive than Americans in general. And so on.The kids, it seems, are all right. But, to evaluate health reform and other big-government power grabs properly, they will need to connect the negative consequences (higher prices, constrained wages, fewer job opportunities, etc.) to the policies that gave rise to them. Then those healthy, and generally conservative, policy instincts can kick in.
Michael G. Franc is vice president of government relations for the Heritage Foundation.
First appeared in National Review Online
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