It is not unusual for difference ages within insurance pools to subsidize others. It happened long before Obamacare in the private insurance market.
There are 70-year-old people that have never really been high-utilizers of health care. Conceivably, this person, let's say a woman, doesn't have heart disease, high cholesterol, diabetes, mental health problems, and rarely gets the cold or flu even. I'm 51, and I never get colds or the flu. I haven't had the flu in at least 10 years, and I can't remember the last time I had even a cold. A lot of risk comes down simply to one's genetics.
Doesn't exist? My grandma lived to be 103-years-old and she hardly ever went to the doctor, was never in an accident, and didn't take any prescription drugs in her entire life. She was opposed to taking pills.
She never had a any major health event. She never had diabetes. Yes, she had children, but she never had one in a hospital--all at home. Her sister lived to be 93, and she was the same. Never went to the doctor, and had no chronic illnesses.
In fact, with the high rate of obesity and diabetes among young people, there are probably some older people that are much healthier than their young counterparts.
So if we are going to use specific exceptions in the health care market, these two women would have subsidized others with their insurance premiums--even into their advanced old-age.
And AKP's example of 100 vs. 1000 employer based pools is a red herring.--at least for the insurance company. Yes, the 100 employee company will pay more per employee for insurance coverage. However that 100 employee company is not the insurance pool by itself.
Any insurance company takes groups of employees in companies, and combines them all into one larger insurance pool. Let's say Sprint and Acme Plumbing Fixtures Company each by group insurance with Humana. Sprint has 1000s of employees and Acme has 100.
Humana combines Sprint and Acme employees into one large insurance pool. The pool becomes the total number of all employees covered from all the companies that seek insurance, and with Humana, that might mean several million people.
As far as these bare-bones coverage plans go for young people, a large majority of them are basically worthless. Even when one is young, you cannot predict when you will become ill, or for what reason. Trying to isolate risk is fool-hardy. If you do become ill, your coverage might not cover it, and if the cost is high enough, you will end up costing taxpayers money. People with limited amounts of coverage often end up on Medicaid when they become ill, and that costs the taxpayer for their catastrophic medical bills.
I used to work for the Medicaid program, and believe me, it happens all the time. It's called the spend-down provision. When your medical bills suddenly become high--even as a young person, and are added to your monthly income, you spend-down into eligibility. A lot of under-insured people spend-down into eligibility for Medicaid while they are lying in a hospital bed.
It's at that moment that people with bare-bones coverage becomes the taxpayers' problem.
And deciding that one doesn't require mental health coverage when young is not wise either because one-out-of-four Americans experiences mental illness (young age doesn't make a difference). In fact, mental illness is the most likely thing to happen to a young person. Mental illness is one of the lesser age-specific medical problems in that one is just as likely to become mental ill at some point whether one is 20- or 60-years-old.
One of the most common problems associated with mental illness is substance abuse. People start self-medicating because of the underlying mental illness. A few social drinks suddenly become alcoholism. The majority of substance abusers have an underlying mental illness.
