So, there’s an op-ed at the Wall Street Journal that takes the time to explain the really big problem (well, one of the really big problems) with forcing people to buy health care. Essentially: there are about ten and a half million people who are eligible for Obamacare, but haven’t signed up for it. About half of them are young people (18-34), and young people are apparently capable of doing math after all:
It makes sense for healthy young people to pay a penalty rather than purchase the insurance. And in 2015 that’s what 6.6 million people did, according to the IRS. Next year the minimum penalty increases to $695 or 2.5% of income above $10,000, whichever is greater. In many cases, that’s still much cheaper than insurance.
This is a fascinating observation: more to the point, RedState warned the world that precisely this would happen. I should know, because I was the one who wrote the warnings. This is what I wrote, back in 2013:
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 [this was written in 2013, remember – ML] that same person will be paying a $350 penalty, because next year it’s only 1%. Now, according to Kaiser’s exchange subsidy calculatorthe 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?
See also here, here, here, here, and here. I’m not really yelling at the Wall Street Journal, mind you: after all, Andy Puzder (the guy who wrote the op-ed) is probably fully in agreement with me that Obamacare is just constantly finding new and exciting ways to implode. I just want to make it clear that none of what’s happening and is going to happen with Obamacare should come as a surprise. People have been looking at the numbers for years and insisting that relying on the individual mandate was unsustainable. Because relying on it is unsustainable; and while I’m thankful that more people are saying it now I still wish that more of them had said it then.