In the few days before open enrollment for ObamaCare closes, the Obama Administration is making a last-ditch effort to boost sign-ups, even as the Congressional Budget Office estimates enrollment will be 40 percent lower than expected.
We millennials, better known as young, healthy Americans, are a key demographic for determining the success or failure of ObamaCare. We pay in more than we use in services and we balance out the older, sicker customers in insurance pools. That is, if we sign up.
So far, millennials have opted out of ObamaCare, causing insurance companies such as UnitedHealth, the nation’s biggest insurer, to suffer heavy losses as they pay out more than they expected. The Obama Administration promised millions of new patients – young people among them – but has failed to deliver the right mix of sick to healthy customers.
It’s not surprising that millennials are opting out of ObamaCare: it’s unaffordable. Even if a young person qualifies for a generous taxpayer subsidy to lower their monthly premium to a manageable range, the out-of-pocket costs and high deductibles mean the plans don't save us much money if we get sick.
So far, the Administration has focused on promoting the carrot of ObamaCare (i.e., the generous tax subsidies), but now they are ready for the stick, the tax penalty.
The penalty for not carrying insurance has jumped from $325 to $695 per person, or 2.5 percent of income if they lack coverage for all 12 months of 2015. Healthcare experts at the Kaiser Family Foundation estimate the average 2016 penalty at close to $1,000 at $969 per uninsured household.
Americans pay this penalty during tax season when we file our tax returns. If we can’t verify healthcare coverage, the IRS has full authority to deduct the penalty from any returns we are due. The average return in 2015 was $2,893, so a $969 dollar tax penalty eats up almost a third of that return.
However, some young people say that, even after paying the penalty, they would still come out financially ahead than if they bought ObamaCare.
The Associated Press reports:
Penalties are the health care law’s nudge to get healthy people into the insurance pool, helping keep premiums manageable for everyone.
“The tax penalty is bringing more young and healthy consumers into the market,” Andy Slavitt, head of the Centers for Medicare and Medicaid Services, said in a recent speech. “We are using a large portion of our marketing resources to make sure that consumers are aware of the increasing fee for people that go without insurance.” Slavitt’s agency oversees the health care law.
Christina Loucks of Franklin, Tennessee, a small city near Nashville, says the way she figures it, she might still come out ahead financially by paying a $695 fine.
The insurance plans she’s looked at would cost her about $100 a month in premiums, after subsidies. That works out to around $1,200 a year. But the coverage comes with deductibles of several thousand dollars. If she got seriously ill, she would be on the hook for that before her insurance started paying. Normally, she just goes to the doctor for allergy prescriptions.
“I still see it as I am keeping $500 in my pocket,” said Loucks. The $500 is the difference between a full year of premiums and the fine for being uninsured, and that calculation might work if she stays healthy.
In her 30s, Loucks is holding down two jobs as she tries to find a career that aligns with her interest in literature. She’s still dealing with student loans, not to mention rent and car payments. “I don’t see the benefit for me,” she said.
As one of the 20-somethings interviewed by the AP noted, I still want to know why should we pay premium prices for “underwhelming health care.” ObamaCare is not affordable and doesn't lead to high quality healthcare. Millennials are smart enough to know a bad deal when we see it. The kooky ads in 2013 that glorified binge-drinking and hookups didn’t work (nor did Pajama Boy).
For all of the cool points President Obama racked up among young people when running for office, his Administration is out of touch it is with the needs and wants of young people, especially with regard to health coverage.