This morning, while running errands with kids in tow, I did something that I try not to do (and usually regret doing): I listened to CSPAN radio when they were taking comments. Normally, this is a mistake of epic proportions: CSPAN callers typically are like Youtube commenters who have been hit with an Evolvo-Ray, only it’s a prototype and there’s still that pesky stress atavism problem. In other words, you have to switch things back to classic rock pretty darn quick – only before I could, the poor panelists who couldn’t escape the onrushing black tide were gamely trying to work out how to get young people into the Obamacare exchanges. I believe that the consensus was: lots and lots of social media.
This all comes down to math. In order for the system to work, you need to get enough young people to sign up for health care plans. Young people typically don’t, largely because they think that they don’t need them. The government is trying to get around this by instituting an individual mandate. Now, let us assume the worst-case penalty (2016’s 2.5% of all income over $10,000, as per this fact sheet). Let us also assume an average income of $45,000 (which is too high, probably, but it’s based on these numbers, so what the heck). $35,000 (remember, everything over $10,000) x 2.5% = $875 individual mandate, per year. Remember, that’s worst-case scenario: next year that same person will be paying a $350 penalty, because next year it’s only 1%. Now, according to Kaiser’s exchange subsidy calculator the average price of a basic-level health care plan is going to be $3,018 per year; and if I’m playing with the calculator properly then there is no case where the subsidies are going to be enough to make compliance less expensive than non-compliance next year. As it stands right now? Cheaper to let the government reduce your tax refund by $350. And if you get sick… hey, no more refusal to insure because of preexisting conditions, right?
It is silly to assume that young people cannot do this kind of math; or that these at least mildly chilly equations can be countered with a YouTube ad, or a promoted Tweet, or a celebrity endorsement. If the government wants to force young people to sign up for Obamacare, then the government will have to produce a real penalty: which is to say, more than it costs to opt-out. That probably means a flat fee, and nasty repercussions for non-compliance. I won’t give our current regulatory state any more bright ideas, but I’m sure that we can all think of some. Government bureaucrats can think of more, I’m sure. What’s more: they will, because the Democrats rather badly need Obamacare to ‘work.’ So they will very quickly institute some very unpopular enforcement mechanisms.
And when that happens, please remember: No Republican voted for Obamacare. Because we knew this was going to happen. We so totally knew.
Here endeth the lesson.
Moe Lane (crosspost)
PS: Note that I didn’t even bring up the employee mandate, largely because the Obama administration flat-out refuses to deal with that entire suite of problems before at least 2015. Suffice it to say that if you’re not getting health care via your employer now, don’t expect to have it next year, either.