The Affordable Care Act has a major arithmetic error that worsens a designed-in bias against the young. It will enforce a burden so extreme that it is not only unjust --- it is actually unconstitutional. Since the ACA is under review by the Supreme Court, there is a chance to make this case to the Justices using a Merits Brief. If the law fully goes into effect, the resulting "disaster of unintended consequences" will make the Sub-prime Mortgage housing crash seem mild by comparison.
The ACA, as testimony in Congress makes clear, uses healthy people (mostly young) as "flotation devices" to support people (mostly older) with high medical expenses. The "pay as you go" approach --- the best strategy for the healthy, underpaid young --- is made illegal. This seems a dirty trick: taking away the only advantage left to young people in our shriveling economy. But it gets worse.
My name is Larry Dickson, and I am a mathematician (PhD from Princeton). I found a major flaw written right into the law. Medical costs for the old, as shown by unregulated insurance rates, average six to seven times those of the young. Due to pressure by selfish elder lobbies, the law limits old premiums to three times young. It tries to restrain increases in premiums, too, which implies the absurd equation
This is exactly like the Sub-prime Mortages and their Credit Default Swaps. People in positions of power think they can break the laws of arithmetic by "covering" them with insurance. But as published economist John Medaille wrote me:
"People think that insurance is magic, you put a little in and get a whole lot out. But of course it's just cost averaging."
When I told him about the age ratio limit, he was horrified:
"I did not know about this ratio in the bill; it puts me in a war against my own children, and puts the heavy artillery on my side."
The costs will overrun. The insurance companies will cry for bailout. The subsidies will fail. And the fix will be dictated by mathematics:
For the median young, because the medical cost distribution in a healthy population is a "hockey stick," even a fair insurance premium would be twice as expensive as "pay as you go." Now this bad math will dictate a 100% surcharge on top of that. The total is now four times "pay as you go." And medical costs are exploding; they will soon reach 20% of GDP. Since young people are relatively underpaid, the extra costs imposed on the median young by the ACA, over and above "pay as you go," will be about 10% of gross income.
That is huge. For many young people, it will eat up the surplus they normally use to start their families. This cannot be made good by a boon at age sixty! It sheds a whole new light on the term "lost generation." No children means no future for our beloved country.
That is also unconstitutional. My lawyer, Dan Lawton, did the legal
research and found that the Fifth Amendment implies a "substantive
due process" right "to marry, have children, and direct the education
and upbringing of one's children." We placed it before the Court and
the parties to the case in a short "certiorari brief" which you can view
or download. At the bottom of this link, under Certiorari-stage documents,
read it yourself:
I asked questions of some of the parties in a Federalist Society teleforum on December 1, and they were unwilling to pursue this unusual angle, even though the speaker admitted it appealed to a different set of Supreme Court Justices than does their standard (commerce clause) argument. This means it could be critical to victory. Associate Professor Brian McCall, of the University of Oklahoma College of Law, told us that this hard-won opportunity is "unique" and "worth pursuing."
We link here Professor McCall's review of my brief in which he says:
"Unlike the primary argument of the states' attorneys-general, Dr. Dickson's argument focuses attention where it belongs --- on fundamental moral principles... We have a duty to our progeny to pay for what we use and not burden them with debt falsely called insurance."
"Regardless of the Supreme Court's decision in this case, Dr. Dickson's prophetic warning should at least be heard. "
There will be no second chance: if the bad math goes into effect, the damage will be irreversible, no matter how much we regret it later. (Think about what the Sub-prime Mortgages did to the housing market. Remember when your house was to be your retirement fund?) Help save our dear children from this looming avalanche.