According to the old saw, you can lead a horse to water but you can’t make it buy health insurance. This is especially true if the horse considers itself in good health.
A study by David Hogberg, a health care policy analyst for the National Center for Public Policy Research, finds that some 3.7 million Millennials — people between the ages of 18 and 34 — do consider themselves in good health, “invincible,” in fact.
The report further reveals that these young bucks and buckettes stand to pocket $500 per year if they opt out of the Obamacare exchanges and pay the penalty (er, tax) instead. Some 3 million in this age group will be twice as well off, saving $1,000, by following the same route. If enough of them do, moreover, the exchanges will enter a “death spiral.” Only older and sicker Americans will participate, dramatically drive up the cost of premiums.
Ironically, a significant portion of this substratum, those aged 18 to 29, turned out in record numbers to vote for Barack Obama in 2008. All told, 66% of this demogrpahic voted for the Democratic nominee as compared with 53% of the overall population. Many of them wised up by 2012, with only 45% casting votes for the incumbent, but by this point the dye was cast with respect to the Affordable Care Act. In June of that year, the Supreme Court had ruled that the individual mandate, the vehicle whereby the law was funded, was a tax, which more or less enshrined it.
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But now, this same youth population has a chance to help undo the damage they helped do. And if money speaks, there’s no reason to suspect they won’t.
Hogberg based his assumptions on the exchange subsidy calculator created by the Kaiser Family Foundation and U.S. Census Bureau data. The “Silver and Bronze” premiums in the Kaiser calculator are based on estimates from the Congressional Budget Office.
Using these calculators, researchers determined:
The out-of-pocket cost for a Bronze-level plan for a single individual age 18-34 without children would be at least $500 above the 2014 fine of $95 or one percent of income and the income at which the out-of-pocket cost would be at least $1,000 above the 2014 fine. Then Census Bureau data was used to determine how many people had incomes at and above those levels. Census Bureau data was also used to determine which individuals were either uninsured or had private insurance not purchased through an employer and therefore were most likely eligible to purchase insurance from an exchange.
For the exchanges to work, the Obama administration estimates it will need about 2.7 million 18- to 30-year-olds to join up later this year. But of the 4.3 million young people in this age range, 2.9 million have a $500 incentive to avoid the exchange. That means the administration is likely to sign up roughly half of the number of Millennials it needs to avoid the death spiral mentioned earlier.
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