ObamaCare: bad news for the Young Invincibles
One of the great structural flaws in ObamaCare is the need to lure “young invincibles” into signing up. These are young and healthy people who would normally either be tempted to forego insurance completely, or opt for very inexpensive coverage to handle unlikely catastrophe. In turn, the free market would normally be inclined to win their business by offering such inexpensive coverage, secure in the knowledge that young and healthy people are less likely to make big, expensive claims. The same actuarial reasoning works in reverse when young people are charged more for auto insurance.
But ObamaCare is socialism, not free market capitalism, although the President and his allies are desperate to appropriate the language of capitalism to conceal the true nature of the program. They love to talk about marketplaces and “choice,” but much of that vast body of ObamaCare law contains mandates that force both industries and consumers to take actions they wouldn’t take voluntarily. (You don’t need thousands of pages of regulations to force people to do what they were going to do anyway.) The system needs young people to pay extraordinarily high premiums, turning them into revenue sources that cover the system’s older, less healthy, guaranteed-loss clients.
This is why enormous money and effort have been invested in luring young people into the system. The early stages of this effort featured popular celebrities pitching ObamaCare to their fans. The end stage, heavy with the flop sweat of desperation, looks something like this:
That’s an actual ad, not a humor-magazine parody. It comes from Colordao, which has not yet broken out of triple digits in actual ObamaCare enrollees. Upon first viewing, I though it might be a picture of the Healthcare.gov programming team. That would have explained a lot.
One of the problems with attracting Young Invincibles is built right into ObamaCare: the much-touted feature that allows “children” to remain on their parents’ plans until age 26. Said parents are currently in the process of discovering just how much that costs. The term “sticker shock” is widely used to describe their reaction.
Children above age 26 have some shocks waiting for them, too. The American Action Forum has been putting together comparison studies on the cost of insurance for 18 to 35-year olds. First, they learned the average 30-year old male nonsmoker is looking at a 260 percent premium increase. The numbers vary by state, of course, but the AAF notes that premiums will “increase in all fifty states and the District of Columbia – from a low of 9 percent in Massachusetts to a high of 600 percent in Vermont.”
The news is not much better for the 30-year-old female nonsmoker, as a follow-up study discovered an average 193 percent premium increase awaits them. And that’s for the lowest-level “bronze” ObamaCare coverage, which is virtually useless, thanks to incredibly high deductibles.
There were no decreases in 2014 premium rates for healthy, 30 year old women under the exchange system as compared to the individual market in 2013. All 50 states and the District of Columbia saw insurance rate increases, with 42 of those states experiencing triple digit percentage increases in premiums for the lowest-priced coverage. Pre-ACA premiums for a 30 year old nonsmoking woman average $74.49 monthly, while post-ACA premiums average $188.72 per month, a $114.23, or 153 percent, increase. The average percent change between 2013 and 2014 minimum level plan monthly premiums is 193 percent, reflecting a nearly 2 to 1 ratio between the two sets of premiums.
So young women who voted for Obama because he promised to make other people cover the modest yearly cost of their birth control are going to end up paying over $1,300 more per year for health insurance? Has President Obama called Sandra Fluke to find out of she’s okay after hearing this news?
This is more than just an annoyance. Young people can’t just smile and hand over an extra thousand bucks or more per year. Barack Obama relentlessly promised that he’d never raise taxes on the Sainted Middle Class, but this is nothing but a disguised tax increase – a vast mandated cost increase to obtain money that will be re-distributed to more “deserving” constituents. Sorry, kids, but it doesn’t stop being a tax just because corporations are dragooned into collecting it.
And if you don’t obey the President’s command to buy that hideously overpriced insurance policy, you’ll be paying a literal tax, seized from your tax return (or bank account!) by the IRS. Supreme Court Chief Justice John Roberts rewrote ObamaCare to make it very clear this was a tax, in order to uphold the Affordable Care Act. How much trouble he could have saved us all, if he’d passed judgment on the law as written, instead of “fixing” it.
The “death spiral” for ObamaCare begins when large numbers of people decide it makes more sense to pay the tax/penalty than to spend a fortune on insurance plans they can’t really use, thanks to those sky-high deductibles. For Young Invincibles in some of the states surveyed by the American Action Forum, that decision is going to be a no-brainer.
Also, contrary to frantic Democrat spin about how the non-functional Healthcare.gov website is no big deal, that’s going to be a killer with young people. They can’t help feeling contemptuous of a trillion-dollar operation that cannot launch a website. They’re not going to spend hours fighting with a bug-riddled online system, or spend hours on the phone with a “navigator”… who is likely to wind up telling them to go to the broken website.
“What you sent seems like a canned response,” an exasperated ObamaCare applicant told a chat-room representative after such a circular conversation, in which he was told to go back to the website and try logging in during “off-peak hours.” The representative, with remarkable candor, responded simply: “It was.”
Contrary to today’s dismissal of the website as a lovely but trivial feature of ObamaCare, the President and his people spent years touting it as one of the central features… in part because they knew that was the only way to get the Young Invincibles on the hook. Those celebrity ads I mentioned earlier invariably tell the kids how easy it will be to log in and grab their ObamaCare with a few mouse clicks. They are entirely based around those promises. There’s almost nothing else in Obama’s pitch to the youth of America besides the website, other than the demonstrably false offers of lower premiums, of course.
After today’s crisis-control meetings, congressional Democrats began muttering that a delay of the individual mandate might just be necessary after all. It might already be too late to save ObamaCare, and not just because of the looming mandate deadlines. This whole scheme relied on peer pressure to work. Obama needed triumphant news stories at the one-month mark, relating happy thumbs-up from a large number of satisfied customers. That’s the only way to bully Americans into thinking the program is here to stay – they have to believe a lot of people like it, and would be very unhappy if it were taken away.
The Young Invincibles are thought to be very susceptible to such cultural pressures. The pressure cooker is broken. Soon we might start seeing grim business projections from health insurance companies that cannot survive without the estimated 2.7 million healthy young revenue sources they anticipated. The first few months after ObamaCare launch are a trap. The whole thing will fall apart if too many people escape.
Update: An interesting cultural data point for the relationship between young people and ObamaCare is the persistent mockery from Jon Stewart of the Daily Show. Stewart is widely seen as a news gatekeeper and opinion-shaper for the young audience (or, if you prefer, he and his writing staff have a good read on what that audience is thinking.) And he’s been brutal during the ObamaCare launch fiasco, from bringing HHS Secretary Kathleen Sebelius onstage for a disastrous interview, to what the Washington Post describes as “slashing hits on the Web site and the President’s handling of the problems,” as they offer the following, somewhat not-safe-for-work clip to demonstrate. It starts out with Stewart blasting Republicans for the government shutdown, and doing a bit of wishcasting for Democrats to make big political gains because of it, but just give him a minute to get rolling.
Team Obama very obviously believes in the power of celebrities to manipulate youthful opinion. They can’t be pleased to see this kind of mockery, especially from someone normally seen as firmly in their corner.