One of the big problems with the last Health care proposal by Hillary is rearing its ugly head in Obama care:
Unfortunately, the Clinton/Mitchell bill’s approach is quite different. Under the so-called “community rating” formula every person in a health alliance will pay the same premium regardless of age, sex, or medical condition. New York State implemented the same one-price-fits-all regime last year, with dismaying results.
In the first year of community rating 25-year-old males were hit with premium hikes of over $500, while 55-year-olds paid about $415 less than under the risk-rated system. Not surprisingly many young people decided to drop their coverage. With fewer young, healthy policyholders available to subsidize older ones, insurance premiums skyrocketed again this year. The upshot: Even older policyholders–who, in theory, should pay less under community rating–are paying slightly more.
Community rating together with universal coverage ensures a more regressive distribution of income. The median income of workers aged 25 or under, for example, is only $18,313, compared to $43,751 for those aged 45 to 54. Yet the Mitchell bill would force young people to pay $650 per year more than the real cost of their insurance and subsidize older people by about $2,000. The bottom line is a net transfer of $59 billion from people in their twenties and thirties to those 55 to 64.
The other problem is that in 2016 social security goes deficit, followed by 2017 the medicare trust is headed for deficit status.