Reminder: Health Care ‘Reform’ Law Raises Costs On Young People
Next week, the United States Supreme Court will hear oral arguments on the Patient Protection and Affordable Care Act (PPACA,) the huge health care overhaul that Congress passed two years ago this month. One of the main talking points in favor of the legislation at the time was that it would improve the economy. However, as the Washington Examiner reports, the White House implicitly backed off that claim this week. Indeed, evidence from the Congressional Budget Office suggests the law will actually reduce employment, not increase it.
PPACA’s negative economic effects only compound the problems of a slow recovery in which young people in particular are hurting financially. The official unemployment rate in the United States is 8.3 percent, but for people ages 16-25, it is almost double that, at 16.5 percent. The Wall Street Journal describes the situation as “Generation Jobless,” and while college graduates have better opportunities than non-college graduates, they are still making less and saving less than if they had graduated in better economic times. There is no doubt that people of all ages are suffering, but unemployment during some of the most important wealth-building years could be disastrous when today’s young adults are ready to retire — both personally and for the country.
Unfortunately, PPACA only worsens the situation because it raises taxes. Yesterday, Americans for Tax Reform highlighted the (at least) four tax hikes contained in PPACA which hurt young people. The first two are especially troubling to me: the “excise tax,” for not buying a government-approved insurance plan; and the “medicine cabinet tax,” which prevents people from using flex accounts and Health Savings Accounts to pay for non-prescription, over-the-counter medicine. The former penalizes people for not purchasing a government-approved health insurance plan; the latter reduces choice and flexibility with one’s personal health dollars.
Young people are less likely to draw deeply on prescription medication benefits or other health care services than older and less healthy policyholders. The result? The government forces young people to pay for insurance plans that they do not need and will not use, and prevents them from taking full advantage of HSAs — health care dollars they would control and manage as part of their own personal budgets. Essentially, the government is forcing young people to subsidize the health care of others during some of their most economically fragile years.
That is bad policy and bad news for young people. PPACA may be marketed as “reform,” but it harms young people, who already are hurting economically, by raising costs and reducing choice.