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Colorado young people discovering that thousands > hundreds. #obamacare #mandate

Forgive me for saying this, but: I told you so.

A note, and a clarification on this Denver Post piece:

Matt Leising spends about $3,600 a year on medication to treat asthma and sinus problems, so he was supportive when Washington politicians were debating the Affordable Care Act.

After the law passed and then began rolling out last fall, Leising went to Colorado’s health care exchange website to look for coverage, but the 29-year-old Littleton resident quickly realized he couldn’t afford any of the plans.

The lowest monthly premium was $175, but the deductible was $10,000, meaning he would still have to pay for his medication and other expenses. He decided to just pay for his medication out of pocket and take the $95 tax penalty for a single person.

The clarification: the Denver Post isn’t exactly familiar with the tax penalty. $95 is a minimum. Matt Leising would have to pay the higher $95 or 1% of his income above $10K in taxes. Assuming that a ‘manager of a small business that doesn’t provide health insurance’ makes about $40K a year (a guess), that means that he will be paying about $300 a year in tax.

And that goes to the point: $300/year is still considerably less than $2,100/year, which is what Leising would be paying for a policy that is effectively useless to him. Which Leising knows perfectly well – he may or may not know that he has to pay more than $95 right now, but the differential is not going to be enough to convince the man to buy a useless policy. And the only way to get him to do that? Well, the Denver Posts quotes small business owner Sarah Hardin later on in the story: “Hardin said the only way she and her husband would buy health insurance is if the federal tax penalty is more than the annual costs of the policy.”

And there is the rub. The system was designed under two assumptions: one, that people would go Full Metal Big Green Guy if a mandate with any kind of teeth was installed*; and two, that young people can’t do math. The first assumption was warranted, I think – but the second one was not, as anybody who can remember his or her first paycheck can attest. It’s downright amazing how fast you remember that stuff from school when you’re trying to figure out on the fly whether they really meant to take that much out of your pay…

But I digress. The bottom line is, as Aaron Gardner put it:

…wishful thinking. Obamacare is not going to work the way that the Democrats thought Obamacare was going to work. And if you’re thinking that this observation of mine sounds familiar, that’s because it is. I was saying that young people wouldn’t want to sign up even before Obamacare took effect; the Obama administration just declined to listen. Guess the joke’s on me for not going to Harvard, huh?

Moe Lane (crosspost)

*President Obama might have tried to impose a higher mandate anyway – after all, he’s not running for anything, ever again – except that while the President can apparently get away with forgiving a tax in today’s climate, there’s no possible way he can get away with imposing one without the agreement of Congress.

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