Freedom Line Blog

Karl Rove draws some much needed attention to the specific provision in Obamacare that increases the price young and healthy people pay for health insurance.

The “Adjusted Community Rating” in the law contains a ban on charging anyone a premium more than three times someone else’s. This new 3:1 ratio, called an “age rating band,” effectively prohibits insurers from pricing their product according to the age, health and lifestyle of the individual consumer (since to liberal ears that would be impermissible discrimination).

But by requiring insurers to treat everyone as if actuarial factors didn’t matter, Obamacare forces insurance companies to extract higher premiums from young and healthy people to pay for the care of older and sicker folks.

That’s why young people are paying more for health insurance under the misnamed “Affordable Care Act.”

As a policy matter, Obamacare insurance plans act as a wealth transfer from younger to older Americans.

Not that you’ll hear anyone in the Obama administration point that out. In fact, as Rove observes, they’re saying just the opposite.

Despite logic and evidence to the contrary, the National Press Secretary for the Department of Health and Human Services said last week that Obamacare “is making health insurance more affordable for young adults.”

Except that it isn’t. And unlike much of what the Obama administration says about Obamacare, that’s no lie.