Robert Samuelson – Blame It On The Seniors

This morning my son and I were discussing the prevalence of misleading economic data out there. Robert Samuelson is one of the few economists that I have respect for. Samuelson in his article, Health 'reform' that burdens our young presents yet another set of reasons why the Health Care Bill is bad legislation. He is correct, the lions’ share of Medicare is going to be sucked-up by the retiring hoards. But if you paid into the system for 40+ years wouldn’t you expect to get what you have paid for and have been promised?

He also has issue with the proposed rate structure that is part of the Health Bill for MANDATED coverage. Insurance pools work because they spread the costs of a few over a much larger group of people, most elderly are going to require more services but they have also been the ones that have paid into those pools for 30 years covering the higher rate of usage by their elders. If you accurately price coverage for each person’s age then people could never afford coverage and would end up either without coverage or on the government dole anyway. Having small risk pools that are tightly grouped by age only exacerbates the problem.

If the cost of health coverage increases as someone ages then employers would be much more reluctant to hire someone over forty strictly on the cost factor. One of the big problems with medical care is that those, even with good insurance, often find themselves with medical bills that exceed coverage and wipe out a lifetime of work and can be forced into bankruptcy after just a few months of illness.

His argument about AARP is good except that AARP by supporting the Health Care Bill is also supporting the $500 billion in cuts to Medicare. He criticizes their support for subsidizing premiums for the elderly but fails to recognize the fact that they have been paying that subsidy for most of their lives.

He also fails in his comparison of health insurance to auto insurance. Auto insurance is competitive, you can buy it from a local company or from a company in another state, you’re free to drop one coverage and pick up another. Auto insurance is not employment driven, when you change or lose your job you do not lose your auto insurance and if you have coverage for a health condition you may not be able to get covered for that condition ever again. Nor is auto insurance subsidized by the government, . A worker who pays into a health insurance pool making it possible for older workers to receive lower rates also expects a similar benefit when they reach their fifties.

The only solution to the health care problems plaguing the U.S. he presents is that seniors should pay premiums in accordance to their age. This is not an expectable solution and is much less than I expect from him.