Obamacare Could Force Premiums Up; Young People to Blame?

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Obamacare, less commonly known as the ironically-named Affordable Care Act, has thus far been an absolute disaster. It was trumpeted by Congressional Democrats in 2010 as a great triumph of human rights; now, most Congressional Democrats are afraid to even be vaguely identified with Obamacare. The rollout of the program has an embarrassment: 4 years and over $1 billion, and the federal website was unveiled as a steaming mess. Millions of individuals were distinctly misled to believe that “if they liked their health insurance, they could keep it”, only to receive cancellation notices months later. Defenders claim that Obama meant “you can keep it if they don’t cancel it“. Either way, the situation is unsatisfactory. These people did not want their policies cancelled. Overall, Obamacare has been a huge blow to the prestige of the Federal Government.

The farce doesn’t end there, however. In order for Obamacare to function as intended, a large number of young Americans are needed to sign up. This is not happening. This is putting Obamacare under water.

As The Guardian reports:

The scale of the challenge still facing the Obama administration over the president’s healthcare was starkly exposed on Monday when new figures showed that less than a third of people signing up for health insurance plans are under 35.

In its first release of a demographic breakdown since the scheme’s launch in October, the White House confirmed fears that much-publicised technical problems may have deterred younger customers and left the market skewed toward those with more incentive to sign up. The figures indicate that it will be tough for insurance companies to balance their books.

Some 55% of those enrolling are aged between 45 and 64 years, compared with just 24% aged between 18 and 34 years old.

Though the numbers represent a positive development from the perspective of bringing affordable health insurance to those most likely to become ill, the figures are thought to be behind government targets and a sign that prices may have to rise to keep insurers in the program.

One of the main principles behind Obamacare was that by requiring everyone to take out health insurance — or face a financial penalty — the scheme would attract large quantities of younger, healthier customers into the market for the first time.

Instead, Obamacare’s other mandate requiring insurers not to discriminate against customers with pre-existing medical conditions or on the basis of their gender seems to have been a bigger draw.

Young people rarely need the services of health insurance. They are typically much healthier, on the whole. The older you get, the more susceptible to illness and injury you become. Older people need the services of health insurance far more often. Most young people do not really need health insurance, while most old people do need health insurance; therefore, there is no compelling incentive for young people to sign up, while old people have a huge incentive. This is why only 24% of enrollees are under 35, while over half are 45 to 65 years old.

Obamacare is a wealth-transferral scheme, from young people to old people. The idea is that everyone will be forced to buy similar insurance policies; no major discounts are offered for being young or low-risk. This subsidizes the old and the high-risk (specifically those with preexisting conditions) at the expense of the young and the healthy. That is what Obamacare is designed to do. The reason for it is this: Old people vote in large numbers, while young people do not. 

Obamacare is a political program. Everyone knows that the elderly vote wins elections, not the youth vote. Politicians know this too. Democrats knew it when they passed the program. That’s why Social Security and Medicare are untouchable; even a mention of messing with these programs awakens the fury of the elderly vote. That’s why Congressional Democrats did not fear an Obamacare backlash at the time; they knew they were screwing over young people, who have no voting clout and would not threaten the next election. It was all a political gamble from the beginning.

They thought they could force young people into buying insurance by imposing a fee for non-compliance. It isn’t working. The policies cost too much. Most young people do not understand the subtleties of Obamacare, but they know this: the policies are too expensive. It is cheaper for many to forgo insurance and pay the fine, as opposed to paying the more expensive premium for a policy they will likely never use.  This is throwing Obamacare into statistical and actuarial turmoil. The program relies on young people to pay the subsidy for old people. Without sufficient young people to pay the premiums for the oldsters, there will be only one option for the insurance companies: raise premiums.

Rising premiums will alienate even more young people and enrage old people. This is going to make Obamacare’s situation even more grave. The only way the Feds can remedy this is to reach out and subsidize youngsters as well as oldsters. There’s a problem with that: most young and uninsured individuals do not make a lot of money. Many do not even pay an income tax. The Obamacare Tax credits, therefore, will not mean anything to them.  There is no way in place for the Feds to subsidize these people. Premiums will go up, instead. Even more young people will stay away. The program will suffer even further. Opposition to the program will grow.

Obamacare is floundering. It was meant to be a triumph of the Messianic state, administering healing and care to the faithful and patriotic. Unfortunately for them, the State cannot become God no matter how much they wish it so, because the State is bound by limited resources just like every other mortal human and institution. Obamacare is figuring this out the hard way. Premiums will have to go up. Be ready for this. 

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