Here's the problem in a nutshell, from an article in Bloomberg earlier this week:
Steven Binko is young, healthy and recently unemployed. He doesn’t see any reason he should be required to buy health insurance next year.
Since losing his job at an Olive Garden restaurant in Jacksonville, Florida, the 25-year-old said he can’t afford to buy health care on his own. Even a premium of $40 a month for a plan through the U.S. Affordable Care Act exchanges would be too much. Therein lies the challenge for President Barack Obama.
Binko is one of 2.7 million healthy 18- to 34-year-olds, dubbed the young invincibles, that the Obama administration has said are needed in the exchanges to offset the cost of providing care for millions of other uninsured people who are likely to be older and sicker. Without young adults, who pay for insurance yet rarely use it, premium costs in the exchanges may soar.
“For young people learning to take care of ourselves, it’s foolish if we have to take care of the older generation too,” Binko, who now lives in Los Angeles, said in an interview.
Young invincibles are the focus of a pitched battle between Obamacare backers and the law’s opponents as the U.S. nears the Oct. 1 roll-out of government-run insurance exchanges. It’s a conflict playing out on television and the Internet, on college campuses and in door-to-door campaigns by volunteers nationwide.
“This demographic is critical,” Caroline Pearson, a vice president at Washington-based consulting firm Avalere Health LLC, said in an interview. “If you mostly have high risk people, premiums go up. It becomes a death spiral.”
If premiums can be kept low, Obama’s signature domestic policy achievement has a better chance of fulfilling its promise of affordably expanding health care to most of the nation’s 50 million uninsured people. If not, the costs may open fertile ground for new attacks on an overhaul that has been under siege by Republicans since it was signed into law by Obama in 2010.
“Obamacare is an awful deal for young people,” said Evan Feinberg, 29, a former Republican candidate for Congress who is now president of Generation Opportunity, an Arlington, Virginia-based advocacy group for young adults that supports less government. “We’re talking about stealing from young people during our leanest years. We don’t have the money to be footing the bill for older generations’ health care.”
Exactly so. Obamacare is an awful deal for young people. College education increasingly is an awful deal for young people. Trying to find a job is an awful deal for young people. And all of those things are multiplied for young black people. Yet young people and young black people were the two constituencies who voted most heavily for Obama.
Nevertheless, when push comes to shove, as much as they might have loved the idea of the first black president and being "down with the cause" and all that stuff, young people are going to pay their cable bills and buy the next new smartphone and make their car payments and go out on Friday and Saturday nights to throw back a few cold ones and look for love in all the wrong places. They aren't going to suddenly think that they need to be suckers and pay for the dialysis of the fat old broad down the street, when they feel just fine and, actuarially-speaking, are just fine.
Look, I am 54, with a wife and three kids, and I pay $20,000 or more a year for the privilege of first paying a $4,000 deductible before I get my first dollar of health insurance coverage. If the deal is that I can't be turned down for coverage if I come in with cancer or in need of a bypass surgery five or ten years from now, and the penalty for not having coverage now is relatively low (a few thousand a year), why exactly shouldn't I bank $250,000 or so between now and age 65 by going bare? And if I'm thinking that way, there's no chance that a kid fresh out of college working two jobs to save up for an iPad is going to think that health insurance is a wise investment. No f'in way.
So prepare for the train wreck. This thing is doomed by definition.