In a new post at The Federalist, writer Peter Tucci describes four ways in which the Affordable Care Act hurts Millennials.

Four Ways Obamacare Hurts Millennials

Every law creates winners and losers. Unfortunately, Obamacare creates more winners than losers—and the losers are disproportionately young. Here are four ways the law hurts millennials.

Cross-subsidies

Obamacare creates state-level insurance exchanges where individuals can purchase insurance. A lot of people who had individual insurance before this year—including older people—have seen their premiums and deductibles rise because of Obamacare regulations that require insurance plans to cover procedures and services that some old plans didn’t cover. But millennials have been especially hard hit, because of a feature of the insurance exchanges called “community rating.”

The community rating provision prevents insurers from charging older, sicker people more than three times what they charge younger, healthier people. But older people are much more than three times as expensive to insure. So, to avoid losing money, insurers have to charge young people much more than the cost of insuring them. This is one of the big differences between the new health insurance markets and normal insurance markets.

The auto insurance market, for example, is a normal insurance market. Auto insurers charge people based on the expected cost of insuring them. So if you’re a 25-year-old male, the auto insurer will look at the average cost of insuring a 25-year-old male (a function of the cost of a car crash and the likelihood that you’ll get into a car crash). If the average cost of insuring a 25-year-old male driver is $30 a month, the insurer will offer a policy for, say, $35 a month ($30 plus administrative costs).

That is not how the new health insurance markets work. A 25-year-old male who buys health insurance today will be charged the expected cost of insuring him, plus an enormous surcharge to help subsidize the cost of insuring older people. In this way, the insurers recoup the money they lose by undercharging baby boomers.

Read the rest at the link below.