Emanuel and other exchange champions propose to tackle the problem with a savvy marketing campaign targeted at the invincibles. “We need to make clear as a society that buying insurance is part of individual responsibility,” he writes. What he really means is that buying insurance is part of the administration’s concept of social responsibility: The young and healthy should be forced to pay more for insurance they might not want or need so that the old and sick will pay less for insurance they do need.
That’s not a glitch in the law, but part of its design. But the penalty for not having government-approved insurance isn’t nearly harsh enough to convince young people to buy coverage. According to the Kaiser Family Foundation’s subsidy calculator
, a 27-year-old making $23,302 a year (200 percent of the federal poverty level) will face an estimated premium of $3,163 in 2016. The federal subsidy on the exchange would cover $1,695, leaving an out-of-pocket difference of $1,468. If our 27-year-old is healthy and has other uses for that money, he’ll most likely opt to pay the fine, about $582, which will automatically be deducted from his federal income-tax refund.
California just released its 2014 exchange rates, which have provoked much commentary and hand-wringing in the press. Avik Roy demonstrated convincingly that young men in California — “bros” — will pay much more for health insurance on the exchange than they would have to pay right now. Megan McArdle played around with Kaiser’s subsidy calculator and found that a 25- or 30-year-old freelancer in California will pay more than he expected to when the law passed — anywhere from a total of $135 to $235 a month. She’s “agnostic” on the question of whether young people will purchase insurance they have heretofore declined to buy, but she notes optimistically that “the individual mandate is now the law of the land, and Americans are pretty law abiding.”
True, most Americans are pretty law abiding. But keep in mind that these are twentysomething men we’re talking about; they have at best a weak incentive to buy expensive, complicated health insurance, even if it is the law. And anyway, the U.S. Supreme Court interpreted the insurance-mandate penalty as a tax, which means choosing not to buy insurance is really just choosing to pay an extra tax. That’s not the same thing as breaking the law, and most young people probably won’t think of it that way.
Cohn and others worry that the administration will be doing outreach on “a tiny budget,” thanks to congressional Republicans, and the word will not get out to the invincibles the way it needs to, and that lack of information will be the real culprit if the exchanges collapse.
But the truth is that no amount of marketing glitz can make the exchanges seem like a good deal for young people, or force them to buy insurance if they don’t want it. To get people to comply with an individual mandate, the penalty for not buying insurance would have to be much more severe — a penalty higher than the cost of a premium, or maybe a stint in prison. But that’s a level of coercion the American people are not ready to allow just yet.
At a press conference last week, Nancy Pelosi was asked about the problem of getting invincibles to sign up for health insurance. She reasoned that “the value of what you get for the cost that you pay is a reduction in cost to you,” which is why she has, she says, the “strong support” of the invincibles. “For everybody, it is going to be, again, a liberation, a freedom.”
What Pelosi really means is that you are going to be liberated from having to make a choice about whether you want to buy health insurance. The government will free you of that burden, like it or not. And don’t worry, you’re getting a good deal. Trust us.
What Pelosi and the others don’t seem to realize is that, while Obamacare might have worked in a dictatorship, it will never work in a democracy. Free men and women, after all, have an annoying tendency to do as they please. This, more than any other factor, will be the law’s undoing.
— John Daniel Davidson is a health-care policy analyst at the Texas Public Policy Foundation.