Despite the GOP’s Attempts to Repeal Obamacare, Health Care Doesn’t Have to Pit Young Against Old

One of the Affordable Care Act’s fatal flaws enables Republican sabotage. But to lay the groundwork for change, progressives will have to resist powerful senior lobbies.
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U.S. Sen. Lindsey Graham speaks to members of the media after the weekly Senate Republican policy luncheon at the Capitol September 19, 2017 in Washington, DC.

Photo by Alex Wong/Getty Images.

Congressional Republicans are gearing up within coming days for yet another effort to repeal former President Barack Obama’s Affordable Care Act via the Graham-Cassidy bill. The bill is unbelievably nasty, the GOP’s worst anti-health care effort yet. Along with eliminating protections against discrimination against those with pre-existing conditions, Medicaid expansion, cost protections wholesale, and essential services like emergency services, hospitalization, prescription drugs, and pregnancy and birth control, the bill entices Republican politicians by showering what Forbes terms “hefty bribes” on many red states while fiscally punishing Democratic (and a few Republican) states that expanded Medicaid to help poorer health consumers.

Once again, it will require another major citizen mobilization to defeat the repeal effort.

Meanwhile, President Donald Trump strives to undermine the ACA by cutting $100 million from its advertising/promotion budget designed to lure more young, healthy people to sign up for health insurance, a move Democrats see as “sabotaging America’s health care system” even if Graham-Cassidy fails.

Unfortunately, one major flaw in the ACA is enabling GOP sabotage. The problem with Obamacare, as with any system that relies on private health insurance, is this: Without lots of young insurees paying premiums but using health services sparingly, the costs for all insured will rise and eventually bring the system down.

Obamacare backers have touted the benefits for young people of the ACA.

Obamacare backers have touted the benefits for young people of the ACA, mainly its provision allowing young adults to remain on their parents’ policies until age 26. This modest reform was initially credited in a Gallup survey with helping 4 percent of Americans ages 18–26 to get insured.

However, ACA backers failed to mention that it also forced considerably higher premiums on young adults to subsidize lower premiums for generally richer, politically favored older constituencies. Actual medical expenses by age indicate 60-year-olds should pay four to six times more for insurance than should 20-year-olds. Despite this, the ACA caps premiums so that older Americans, who cost the most to insure and provide care for, pay no more than three times that of the least expensive demographic, young adults.

“To keep costs lower for older consumers (who politicians know vote more often), politicians are essentially picking the pockets of younger consumers to balance the health care premiums table,” market analyst MainStreet.com noted. “Cynical? Maybe. Good politics? Probably. Cheaper for older Americans? Definitely.”

Health coverage is a terrible place for generation war. In fairness, Democrats assumed the adversely affected would be small. Most poorer young adults who faced higher premiums would be eligible for the ACA’s provision of federal Medicaid funds to subsidize health insurance for low-income consumers. However, governors in most Republican-controlled states refused federal Medicaid funds, forcing young people to pay the full rate for their plans.

The Graham-Cassidy bill abolishes the ACA’s cap on older-age insurance premiums.

The result of bipartisan betrayal of young people proved disastrous for the ACA, as Republicans quite likely intended. The math is damning. Before Obamacare was enacted, the uninsured tended to be poor (Americans with incomes under $25,000 are three times more likely to lack health insurance than those whose incomes top $75,000) and young (the median income per household member for 20-year-olds is less than half that of 60-year-olds). But the ACA’s caps on older-age premiums made health insurance even more unaffordable for mostly lower-income young Americans—many of whom instead paid the cheaper legal penalties imposed by the individual mandate for not buying insurance.

Clearly, boosting premiums was the opposite of the approach needed to lure the historically underinsured young consumers the ACA most needed. After the law took effect, 24 percent of 18- to 26-year-olds remained uninsured (and did not remain on their parents’ plans), and another 27 percent of those between ages 27 and 35 lacked coverage. Together, that accounted for 23 million uninsured people, counting among them some of America’s poorest.

The problem wasn’t just that Democrats were “happy to help out” powerful lobbies for seniors, as Forbes noted. It was exacerbated by Democratic leaders’ long-term antipathy toward young people. Instead of enacting practical strategies to help poorer young consumers, the Obama administration tried to cajole them via an advertising campaign. Pro-ACA commentators ridiculed them as drunken, accident-prone “knuckleheads” and “young invincibles” squandering money on “beer and cigarettes.”

Not surprisingly, the negative tactics largely failed. About 15 percent of 19- to 34-year-olds remained uninsured (and many more under-insured) in 2016, with the lowest-income groups three times more likely to have no insurance than the highest-income groups. Today, 18- to 34-year-olds now make up just 28 percent of health care enrollees, far short of the 40 percent needed to forestall sharply increased premiums.

Republicans bent on sabotaging Obamacare are exploiting the ACA’s generational disparity to eliminate health insurance for poorer consumers of all ages. The Graham-Cassidy bill abolishes the ACA’s cap on older-age insurance premiums while removing subsidies that help the young—the worst of both worlds.

What do we do now?

In bizarre Beltway zeitgeist in which both parties’ health care plans feature screwing their own staunchest constituencies—the Democrats (young), the Republicans (middle-agers)—can a bipartisan, inter-generational, fair compromise be devised? Options are limited. Even if Graham-Cassidy fails and enough Republicans prove ready to compromise, there still seems no way to reform Obamacare or any market-based health insurance scheme that avoids harsh old-young generational trade-offs.

Arguing that it’s unfair for older people to pay more for health insurance because of their age is a non-starter. It’s also unfair that older people have much higher incomes and more wealth than younger ones, and also receive more public benefits. Calling young people stupid and forcing them to subsidize higher-cost older consumers evades the real culprit: inequality.

We can start with reversing Democrats’ self-defeating animosity toward the young.

Other western nations solve these problems by providing universal, single-payer health coverage funded by general taxation, as Senators Bernie Sanders and Kamala Harris are proposing. However, genuine health care reform is politically hampered by an even larger issue: Any aid for the young antagonizes many elders angered by social and demographic change. Republicans are unlikely to consider single-payer legislation, and meaningful reforms to the ACA also seem problematic given Republicans’ zeal to make Obamacare fail even though they clearly have no alternative. So, that leaves state and local initiatives.

To lay the groundwork for change, progressives have to confront the underlying generational conundrum: Many over-45 Americans believe young people’s gains are old people’s losses, an apprehension that has a racial element too because three-fourths of Americans 50 and older are white, compared to just half of Americans under age 25. We can start with reversing Democrats’ self-defeating animosity toward the young. In fact, young people’s greater support for single-payer, public option, and government subsidy (65 percent support such approaches in a recent Pew poll) could build a unifying message that social inequality initiatives help the poorer young and old alike.

Liberal states such as California, representing a huge consumer market, have already moved past the initial phase of debating their own single-payer systems, which polls indicate have widespread support.

Grassroots organizing so far has proved effective in stopping Republican efforts to kill the ACA. If we succeed again, grassroots organizing again will be crucial to building the next state and local efforts—both with activist lobbying and by injecting dynamic new ideas into Washington’s zero-sum Obamacare-versus-NObamacare impasse.