March 12, 2014
Here we go again. The NYT told readers:
“A quarter of private plan enrollees are ages 18 to 34, who tend to have lower medical costs and their premiums are needed to help pay for the higher costs of insuring older and sicker consumers.”
In the real world outside of wonkville wisdom the age of enrollees makes little difference to the finances of the program. It will matter if there is a skewing by health conditions. The logic is simple and straightforward. A healthy 60-year old and a healthy 25-year old both cost the system almost nothing. The healthy 60-year old will on average pay premiums that are three times as high. This is why the system needs healthy 60-year olds at least as much as it needs healthy 25-year olds.
A short analysis from the Kaiser Family Foundation goes through the arithmetic, but apparently they don’t have access at the NYT.
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