Whom Will Obamacare Burden? Ctd

Josh Barro sees the “rate shocks” touted by opponents of Obamacare as evidence that “Obamacare is working as planned”:

[W]hat’s happening in California is exactly what was supposed to happen: If you’re young, healthy, and affluent, your insurance is getting more expensive. If you’re old, sick, and poor, it’s getting cheaper. That’s because The Affordable Care Act — commonly referred to as Obamacare — is designed to be a fiscal transfer from the young to the old, the healthy to the sick, and the rich to the poor.

It’s not just Obamacare: Any system that shifts health expenditures from the private sector to the public sector causes transfers like this. … [I]nstead of hiding the transfer from the young and healthy as part of a tax bill that finances the whole government, Obamacare causes it to show up in the form of a higher insurance “premium.” That tax increase will make some young and healthy people worse off. But they would also be worse off if the government provided direct health care subsidies to the old and the sick and used a broad-based tax like a payroll tax to finance those subsidies. In fact, that’s how we finance Medicare, which is a huge fiscal transfer from the young to the old.

Douthat looks to the future:

The unanswered question, though, is whether that “a little more” will actually be — or gradually become — a lot. And that’s what’s getting left out of some of the liberal brush-offs (yes, I’m looking at you, Chait) of the “rate shock” issue. Whatever young people’s attitudes toward insurance in the abstract, if rates go up way too fast, they almost certainly won’t buy into the new system, opting (whether consciously or semi-accidentally) to pay the fine instead. And that kind of mass opting-out is basically Obamacare’s worst-case scenario, which is why it features so prominently in the excellent primer that Jonathan Cohn wrote last month on implementation problems that the bill’s supporters should actually worry about.

Previous Dish on the distributional effects of Obamacare here.