Study: ObamaCare's bum deal for young people, quantified

As everybody who hasn’t been determinedly keeping their heads buried in the sand is already well aware, the Patient “Protection” and “Affordable” Care Act was designed to rope young people into paying a disproportionate amount for their health insurance premiums in order to help pay for the inherently riskier insurance pools that it creates.

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ObamaCare offers the choice, however, of paying a penalty rather than purchasing insurance, and the trouble for the administration is that the penalty is looking like it might be a much more attractive option for some of the very same young people they need to purchase needlessly expensive insurance plans in droves.

A new study offers some numbers on exactly what that choice might look like, via IBD:

Nearly 4 million young people will be much better off financially if they refuse to buy an ObamaCare insurance policy and instead pay the fine for going without coverage next year, according to a study released Thursday by the National Center for Public Policy Research.

The study found that 3.7 million childless single people age 18-34 would save at least $500 if they didn’t buy insurance and instead paid the tax penalty next year. Of those, more than 3 million would save at least $1,000.

That’s despite the heavy taxpayer subsidies many of these young people would be eligible to get. The ObamaCare insurance exchanges provide tax credits to offset the cost of insurance to those with incomes up to 400% of the poverty rate. …

“This age group must buy insurance in the exchanges to cross-subsidize people who are older and sicker,” explained David Hogberg, a policy analyst at the conservative National Center. “Without them, the exchange will enter a ‘death spiral’ where only the older and sicker participate and the price of premiums increases precipitously.”

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The penalty is designed to increase over time (and who knows if the Obama administration won’t pull another completely unilateral and arbitrary move if things start going badly and decide to jack up the penalty once again), and maybe plenty of young people would rather live with health insurance than without it, even with the decreasingly appealing prices.

A study in June from the Kaiser Foundation, however, suggested that at least a quarter of young people already sound willing to hedge their bets, and the lingering state of economic stagnation and youth unemployment probably isn’t going to do much to help push them in the Obama administration’s desired direction. They are definitely sweating this one, as they should be.

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Ed Morrissey 12:40 PM | November 21, 2024
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David Strom 11:20 AM | November 21, 2024
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