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Wise Beyond Their Years

The young won’t show up for Obamacare.

Dec 9, 2013, Vol. 19, No. 13 • By JEFFREY H. ANDERSON
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Take another example: a 31-year-old making $35,000 a year. On average, the cheapest bronze premium for this person would be $2,340—also roughly three times the price of the cheapest plan available pre-Obamacare. The taxpayer-funded subsidy, on average, would be $258. Meanwhile, a 61-year-old making that same $35,000 would, on average, get a subsidy of $3,223—more than 12 times as much.

Moreover, if a 31-year-old man making $35,000 and a 26-year-old woman making $30,000 were to get married, giving them a joint income of $65,000, their combined subsidy would drop, on average, from $740 to zero, as Obamacare’s steep marriage penalty kicks in.

These figures reflect average subsidies across the 50 largest counties. For young people, however, the averages are inflated by hefty subsidies available to them in a few places—particularly in New York, where higher subsidies are needed because young people’s premiums have been even more dramatically spiked by New York’s outright ban on age-rating. For the young, therefore, the median—or typical—subsidy is much lower than the average subsidy. Indeed, the median subsidy available to the 26-year-old making $30,000 would be $77 for the cheapest bronze plan, covering a mere 4 percent of the premium. For the 31-year-old making $35,000, the median subsidy would be zero.

Meanwhile, the median subsidy available to a 61-year-old making $30,000 would be over $4,000, and the median subsidy for a 61-year-old making $35,000 would be over $3,000.

So: The typical twentysomething making $30,000 would get a taxpayer-funded subsidy of less than $100. The typical person between 21 and 41 making $35,000 would get no subsidy at all. And each would be on the hook for a post-subsidy premium of around $2,000, about three times the cost of insurance pre-Obamacare. 

Again, that’s for the cheapest bronze plan. Such plans routinely have deductibles over $5,000—double the $2,500 deductibles for many pre-Obamacare “catastrophic” plans—and narrow doctor networks. 

Then there is a disincentive unrelated to cost: Simply signing up for plans on the Obamacare exchanges invites the very real prospect of identity theft, as former Social Security commissioner Michael Astrue and others have warned.

In light of all this, many young people may decide it makes far more sense for them to pay the fine than pay the premium. The previously mentioned 26-year-old making $30,000 would be fined just $203—a pittance compared with the average post-subsidy premium of $1,652. The 31-year-old making $35,000 would be fined $253—nothing next to the average post-subsidy premium of $2,082. In paying the fine, each could take comfort in knowing that, in case of expensive illness or injury, it would always be possible to buy insurance at the next open enrollment period, which would usually be less than six months away.

Regardless of whether any given individual chooses to pay the low fine or the high premium, this much seems clear: Under Obamacare, there is more incentive for previously insured young people to decide to go without insurance than for previously uninsured young people to decide to buy insurance. 

In short, Obamacare is not for the young. It artificially raises their insurance costs, limits their choices, jeopardizes their privacy, and offers them meager taxpayer-funded subsidies in comparison with those given to older people of the same means. But Obamacare depends on enticing the young to sign up. If young people ignore this administration’s propaganda, take a look at the data, and think for themselves, they won’t. 

Jeffrey H. Anderson is executive director of the newly formed 2017 Project, which is working to advance a conservative reform agenda.

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