Home Depot Co-Founder Langone: Obamacare 'Defies Whole Concept' of Cheaper Health Insurance

Wednesday, 30 Oct 2013 11:58 AM

By Michael Kling

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Obamacare, by its very nature, can't make healthcare more affordable and "defies the whole concept" of its key goal, says billionaire entrepreneur Ken Langone.

Many experts say healthy young people must sign up for health insurance en masse in order for Obamacare to be successful. If more people, who don't need as much healthcare as older generations, buy insurance, they will bring down insurance costs.

"Insurance is a fairly simple," the Home Depot co-founder told CNBC. "It's spreading risk. It's sharing risk."

Editor’s Note: New Video Exposes a ‘Great Retirement Heist’

"You're not going to bring 35 million more people into the pool for care and say, 'We're going to do it cheaper.' We're living longer. The longer we live, the more healthcare we need.

"Those kids can now wait for a condition, a pre-existing condition, and now say, 'I want insurance,'" Langone argued. "The risk to the insurance company goes up exponentially because the kid is coming in unhealthy, not healthy."

If Americans don't buy insurance as the law requires, they'll have to pay a tax penalty. But the penalty, Langone says, isn't large enough to motivate young people to sign up for coverage under Obamacare, also known as the Affordable Care Act.

They "can pay the penalty and not come in at all. But the penalty is not going to be enough to generate the revenues to offset the higher cost of older people," he said.

The law also forced Home Depot to stop offering insurance to its part-time workers, he said, saying it prohibits offering insurance to part-time employees. "We didn't end it, the government ended it."

However, Democrat National Committee Chairman Howard Dean disagrees with Langone. Healthy young Americans don't have to sign up for insurance for Obamacare to work, Dean told ABC News.

"It is not true that if young people don’t sign up the program doesn’t work," Dean told George Stephanopoulos on ABC News’ "This Week." "That’s false," he said.

"Everybody assumes you can’t do a community rating, without an individual mandate, and that’s not true," said Dean, a former governor of Vermont.

"And I know that because I did it 20 years ago, we did most of the stuff that’s in Obamacare. We have all — almost every child under 18 has had health insurance in our state for almost 20 years."

While the Obama administration should be blamed for the program's rocky rollout, Republicans should also be blamed for their constant efforts to defund the program, Dean added.

Editor’s Note: New Video Exposes a ‘Great Retirement Heist’

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