Posted on 06/21/2013 5:48:23 AM PDT by SeekAndFind
Starting in 2014, Obamacare will attempt to get almost every American to obtain health insurance. The system desperately needs healthy young people, millions of whom don’t have health insurance, to sign up because their money is needed to subsidize treatment for older, sicker Americans. But will they?
Young people will be asked to buy policies that don’t reflect the low risk they have of getting sick. Obamacare allows health insurers to vary premiums based on age, but they can charge older customers only up to three times as much as healthy young customers, while most insurers have as much as a five- or six-to-one ratio. This means lower prices for older (and wealthier) folks, but high prices for the young. “They’ll have sticker shock,” House budget chairman Paul Ryan told me.
Indeed, the law will require four out of five young Americans to pay more than they otherwise would for health coverage — yet another form of generational theft from young to old that ought to sour young people on government “help.”
Douglas Holtz-Eakin, a former director of the Congressional Budget Office, has found that less than half of those under 30 will sign up for Obamacare coverage on the exchanges if their premiums rise by 30 percent. Those kinds of increases for private policies are already routinely showing up in states preparing for Obamacare. Even if premiums don’t rise dramatically, the process of signing up for health insurance has become dramatically complicated. The online application that has become the standard for everyone seeking Obamacare subsidies for coverage runs to more than 60 pages’ worth of questions, demanding information on income, family status, details on any health insurance offered at an applicant’s workplace, and lifestyle.
Ezekiel Emanuel, a physician who is brother to former White House chief of staff Rahm Emanuel, has spent a lot of time gaming out how Obamacare will work. He frets that young people will be “bewildered,” and they may “forgo purchasing insurance and opt to pay a penalty instead.” Indeed, the penalty starts at just $95 a year, and, though it will automatically rise some, Democrats will be loath to propose increasing it to an effective level.
And whether they are slackers, students, or software engineers, young people are smart enough to figure out that they can easily wait to sign up for coverage until after they get sick. Obamacare requires every insurance company to take anyone on as a customer regardless of any pre-existing conditions.
If young people boycott Obamacare, the law of adverse selection kicks in. Too few young people in an insurance pool means fewer healthy people to subsidize the sicker people. Costs and premiums will rise more than expected, which will lead to fewer young people signing up and costs going up even more. In insurance jargon, it’s called a death spiral.
Grace-Marie Turner, head of the free-market Galen Institute, has looked at a typical young person’s decision tree on Obamacare. If someone is 27 years old, single, and making $34,000 a year, he will have to fork over more than $300 a month for a basic health-care package — that’s 50 percent more than he is likely paying now. Obamacare would send him a check for $20 a month through its subsidy program, but he or she will still wind up paying some $1,000 a year of after-tax income for basic health insurance. That’s a lot for someone with a decent job who is trying to save money for a house or to start a family.
No wonder Health and Human Services secretary Kathleen Sebelius got caught visiting with companies she regulates to try to shake them down for contributions to promote signing up for Obamacare (what the federal government calls “educational” efforts). The legally dubious slush-fund strong-arming is a sign of desperation. With young people’s support for Obamacare at or below 40 percent in many polls, the likelihood of the exchanges’ experiencing “market failure” is high. If that happens, the whole rotten edifice of Obamacare will be exposed.
When it comes to the drug of government-run health care, my advice to young people is the same as that offered by Nancy and Ronald Reagan about illegal drugs over 30 years ago: “Just Say No.” Both products may create the short-term illusion of well-being, but it doesn’t last, and the long-term complications are devastating.
— John Fund is national-affairs columnist for National Review Online.
Which is why Ubama must have the US taxpayer eat outstanding student loans.
All of this is disaster without TORT REFORM!
LOVE! that picture. I had a good laugh out loud at the expense of those fools..
No student loan, no credit card debt here.
Also not paying for Obamacare. Obama’s welcome to penalize me for 95/year, but thanks to the atty general here - it’s unenforceable.
Young people who do NOT join the bandwagon of Odumbocare will suffer the fate of the IRS. “Payup or else!”
I'm not 27 .... and I'm not sure what I'm going to do, but it won't be Obamacare.
I love this short, simple article. Pay $95 or well over a thousand for a young low wage worker? I’m going to put this on my waiting room.
The other thing the article does not state is that there will still be co-pays and deductibles further increasing out of pocket costs.
Most low wage workers w/o insurance will not fall for the BS.
“lofos”
All of which gets us closer to nobama's ultimate goal: Single Payer.
They can’t pay their student loans. They certainly are not going to sign up for Obamacare. Millions of people are just not going to bother with it.
So there will be a budget shortfall? No problem, McCain and Graham to the rescue.
Probably taking into account that the premiums are tax deductible so that lowers out of pocket.
Being of the generation that was subject to the draft, I wonder how long it will be before it is reinstated as a way to put younger people into the system. I hope it isn’t so but I recall how unfair it was to those families without the means to avoid going.
I did the same calculation and got the same answer you did.
Numbers in article don’t seem to add up.
Not sure why it is just the young that will opt for the penalty. Why not old people too?
To the young people that voted for Obama but don’t want to pay the premiums for Obamacare:
What the heck did you expect? This IS the socialism you voted for!
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