[throwaway9848]

The subsidies are to poor people. The poor people get medical care anyway, at ERs, where hospitals cannot refuse them. Or they forgo the care until mundane problems become chronic or acute problems (and they end up in the ER). ERs happen to be the most expensive means of providing heath care. So, to answer the first part of your question, the subsidies exist so that people who cannot afford heath insurance via the exchanges can still have health insurance. And the reasoning behind it is to reduce health care costs that emerge from lack of access to care.

I know less about the age rating bands. Off the top of my head, it's to smooth costs over a lifetime. So it's a wealth transfer from your young self to your old self, if you have typical health care costs over your lifetime: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/

edit: http://www.rwjf.org/content/dam/farm/reports/issue_briefs/20... for more on age banding.

[hga]

There are massive subsidies going to the 50-64 years of age crowd.

Now, yes, you can argue that it's good to smooth costs over a lifetime ... but that also hits the young very hard when they can least afford it. As does their FICA taxes for Social Security and Medicare.

As we've seen in pretty much every other developed country, this whole welfare state approach is a self-correcting dead end, as enough of the young decide not to play the rigged game and decline to have children.

[nickff]

Mandatory coverage was another wealth transfer; when 30% of patients are not paying for their medical treatments, and the other 70% are being forced to cover that cost, it is a wealth transfer.

To be clear, I am not saying wealth transfers are bad, but we should be honest about what is happening.

[throwaway9848]

I do see where you're coming from. Maybe if I said I don't believe it's a _new_ wealth transfer? 30% of the population is not going without care today - they are getting ER care for non-emergent reasons or they're covered by Medicaid or the VA. The Medicaid/VA is a direct cost and the ER visits are indirect via increased costs.

Unless we want to decide as a country to not subsidized healthcare for those that can't afford it and to allow hospitals to refuse treatment without upfront payment... then let's be honest about what's happening there, too. The money comes from somewhere, it's every bit as much of a wealth transfer.