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Why a 27 Year Old Probably Won’t Buy In To Obamacare February 14, 2014

Posted by geoff in News.
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You all know that Obamacare is suffering from a very basic problem: the invincibles (young, healthy people) are not likely to incur significant health costs, so they don’t want to sign up for insurance just to subsidize old people’s health care. But Ironman at Political Calculations has actually crunched the numbers for a 27-year-old, and here’s what he’s found:

…we estimate that an individual would have to have an income above $285,200 before paying for a Bronze plan would more economical than paying the additional income tax. In 2016, when the additional Obamacare income tax will increase to be a maximum of 2.5% of an individual’s income, buying a Bronze-level health insurance plan with the costs we’ve listed above would only begin to make sense if their income was greater than $120,000.

So, unless a health insurance consumer has a reasonable expectation that they will have very high health care bills in the near future, it doesn’t make sense from a personal finance perspective for them to buy health insurance. And since the law mandates that they cannot be denied coverage if they do develop a costly medical condition, they can simply hold out until the next enrollment period when their situation might change, or take advantage of the alternatives that many people are using to avoid Obamacare and its taxes altogether.

So the Obama administration has to either hope that either relatively young people are incredibly altruistic (altruistic beyond their means, I suspect) or incredibly stupid. Or both.

Comments»

1. Michael - February 14, 2014

And since the law mandates that they cannot be denied coverage if they do develop a costly medical condition, they can simply hold out

Worse yet, the law also forces emergency rooms to admit them for an unexpected traumatic event like a car crash, where they can rack up enormous charges that are all dischargeable in bankruptcy, thus further mitigating the real risk of not carrying insurance.


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