Signing up those young, healthy guys on the Obamacare exchanges
We keep hearing that in order to keep from going under because of ever-increasing premiums, the Obamacare exchanges must enroll a lot of healthy young people. We even hear it from the White House, according to Ezra Klein:
How many younger people are needed each year to hold down premiums depends on how many people sign up for the marketplaces. If the total this year is 7 million people, then about 2.7 million need to be in the 18-to-35 set.
This group is “overwhelmingly male…majority nonwhite…[and] [o]ne out of every three lives in California, Florida or Texas.”
Why male? Why nonwhite? My guess would be because women and whites that age are somewhat more likely to have employment-based insurance and therefore wouldn’t be going to the exchanges (as long as their employers continue to offer the alternative).
Given that this young male non-white demographic is the group Obamacare’s exchanges are especially seeking, it also appears that, although it might be a young and healthy bunch, it’s not an especially solvent one:
Young adults are the cheapest group to insure but the group most likely to go without insurance. The reason, put simply, is that young adults are likelier than any other group to be poor. Smith calculates that 19 million young adults between 18 and 34 lack health insurance. Under Obamacare, 8 million of them will qualify for free insurance through Medicaid. An additional 9 million will qualify for subsidized insurance in the exchanges.
In fact, the vast majority of the young adults expected to be in the marketplaces are expected to qualify for subsidies. Linda Blumberg, a health-policy analyst at the nonpartisan Urban Institute, has done extensive work modeling who is likely to sign up for insurance on the exchanges. She estimates that 96 percent of 21- to 27-year-olds will get some income subsidies
Wow. Let that sink in: the vast, vast majority of this “young and healthy” group they’re so very eager to get on the exchanges will be subsidized, and most will be pretty heavily subsidized at that (half will be on Medicaid, for example). So, why go after them? Signing them up would go far towards preventing the “death spiral” problem caused by the exchanges having too many old and sick people, but it certainly wouldn’t be likely to do much to reduce the amount Obamacare will cost the government, because of the high proportion of subsidies.
Therefore it’s hard not to conclude that the government is purchasing protection for the exchanges. Sign up for the free stuff, government says. We’ll pay you; it won’t cost you that much at all. And in turn, the government is counting on the fact that they won’t be making that many claims, which will balance out the other enrollees who’ll be making a lot of claims.
The insurance companies will get their money just the same; what do they care if it comes from the insured person him/herself or from the federal government? It’s the same money, and it keeps them from having to raise premiums if the whole scheme works as planned. Who loses? The taxpayer, because it’s difficult if not impossible to believe that this arrangement will be deficit neutral, and can be paid for by the existing tax structure that’s supposed to finance Obamacare.
Well. Let’s cast our minds back to the days before Ocare was passed by the Dems. Do you remember the oft-spouted claim “There are 40 million without insurance”? Never critically broken down by the NYT et al.
Between the healthy young (19 million) and the illegal migrants (>10 million), we have a ~75% majority of the uninsured, who either a) don’t want it, can’t afford it, don’t need it, or b) are ineligible, being illegals.
We knew that then, but no one else did, and the MSM did nothing to inform the LIVs.
Thanks for nothing, Ezra Klein; you are 3 years too late.
“Who loses? The taxpayer . . . .”
This is the economic law of gravity; the consumer always winds up paying the bill. Everything else is but a pass-through to the ultimate consumer.
In a free market, we have a choice of which of those pass-throughs we will accommodate; with the govt, we are mandated to support pass-throughs whether we would otherwise choose to or not.
That is why Krauthammer is quite succinct when he says that under Progressivism one can do anything one wants as long as it’s mandated (by the govt).
It’s a kind of rape, really.
“Against Our Will.” But no Susan Brownmiller will write about it.
Most Hispanics will be surprised to learn they are non white. Democrats create race for political gain.
It’s Gangster Government. Jesse James, Capone, Dillinger, Drug Cartel Bosses and Obama have the same tactics: Steal money from anyone who has it; give some of it away to poor slobs so they stay poor and dependent and supportive.
Eliot Ness where are you.
“The insurance companies will get their money just the same; what do they care if it comes from the insured person him/herself or from the federal government?”
That’s true in the short run but how long before subsidies rise to the point where eliminating the middle man, i.e. the insurance companies is championed as the only viable means left to control the rising cost of health care?
@ Don Carlos: You left out another important cohort: the temporarily uninsured. Many of the folks counted as uninsured are only uninsured for a short period of time, due to a job change or something.
When you get right down to it, there probably weren’t more than a few million citizens who were truly left out in the cold as a result of not being able to get insurance. The vast majority of “uninsured” were comprised of young invincibles, the voluntarily uninsured, folks who qualified for Medicaid but never enrolled, illegal aliens, and people who just happened to be in the midst of a temporary gap in coverage at any given time. Furthermore, we need to keep in mind that many of the remaining people, even though they should be counted as legitimately uninsured, nevertheless will stay healthy enough that they won’t have insurmountable medical expenses anyway.
The rational approach to this problem would have simply focused on dealing with the expenses of the legitimate hardship cases and left everyone else out of it.
Why couldn’t the government simply take $25 billion to fund an independent charitable trust that people who were truly left out in the cold and who in fact incurred crippling health care expenses could apply to for compensation?
GB…
LONG before that …
The money-printing engine will destroy the currency.
Go to Zerohedge — and Jim Rogers —
They CAN’T get off of the railroad to hell.
It’s like a Mad Max movie — without the happy ending.
http://www.imdb.com/title/tt0089530/
“Wow. Let that sink in: the vast, vast majority of this “young and healthy” group they’re so very eager to get on the exchanges will be subsidized, and most will be pretty heavily subsidized at that (half will be on Medicaid, for example). So, why go after them?”
I’ll submit that a good portion of the reason is to try to get these people hooked on the heroin. Once on the “heroin” of the “free” govt subsidy, the hope is that they never wean themselves off, and remain a ward of the state forever.
richieemmons, you’ve hit it square-on. This is a way to get young people’s votes set in concrete before they (some of them, anyone) change their political stripes as a result of being mugged by reality, as the saying goes. (Sorry about the multiply mixed metaphors!)
The taxpayer, yup. And that is a group that the administration is actively working to SHRINK – subsidies for people at income levels up to 400% of federal poverty? Seems like a way to create a permanent majority, as long as all these people vote in what the Democrats deem is their economic self interest. The only hope for fiscal conservatives is that people do NOT always decide that their economic self-interest (as defined by either party) is the best thing to base a vote on.
Look, any scheme that relies on the enrollment of people aged 18-30 while they can remain as dependents under their parents’ coverage up until the day they turn 27 is a S-C-A-M.
Conrad: You are quite correct.
The whole health insurance (not care) crisis was manufactured, made up.
Reading over at Ace’s, he is pointing to a CBS poll which really looks bad for Obama.
Maybe there really is hope for this country.
Cautiously optimistic:
“LONG before that …
The money-printing engine will destroy the currency.” blert
I’ve been speaking to that issue for many years. And I agree that the fiscal collapse is mathematically inescapable. But the money-printing engine has already destroyed the currency. Every western nation is actually bankrupt but the party goes on because our fiat currency is disconnected from a physical reference point.
Whether the collapse will occur before the single payer nationalization of health care is enacted is another question however.
Maggie Thatcher famously said that, “the trouble with socialism is that eventually you run out of other people’s money” but that of course presumes that the state won’t simply seize everything and outlaw private property.
The Soviet union might still exist were it not for the Reagan arms build-up and almost nine out of 10 Scottish households take more from the public purse than they contribute in taxes…So the socialist gravy train has much more ‘carrying capacity’ that many people imagine.
The American economic engine is also incredibly resilient and, currency is ultimately, an artificial symbol of an underlying reality; land, crops, mineral wealth, industrial capacity, energy production, human labor and intelligence do not simply evaporate during a sovereign bankruptcy.
“The insurance companies will get their money just the same…”
At first, yes. But then, just like Medicare payments to doctors, the amount paid will get smaller and smaller. But by then it’ll be too late.
A particularly good read about the economics of Obamacare is the following link (H/T Realclearpolitics):
http://online.wsj.com/news/articles/SB10001424052702304439804579208020624280740
The final paragraph is particularly insightful and bears repeating:
Sarah “Death Panel” Palin vindicated once again!
Extraordinary outbreak of hate from progressives lately. Seems to indicate they sense the gig is up and cannot imagine giving up power.
If that is the proportion the exchanges need, then it is already over as far as the death spiral is concerned. And there is a forgotten issue here- these kinds of poor young people are the most likely to default on the premium payments, both because of sheer economic circumstance and the fact that this cohort is the most irresponsible financially. The exchanges could get 2.7 million of them/7 million, and still go under as 30% of them default out after 1 or 2 premium payments.
Death spirals, hyperinflation, manufactured and engineered disasters, it’s almost as if we live in a banana republic or a soon to be North Korea.
That 26-year-olds can stay on their parents’ insurance is another red herring: when the employer mandate finally kicks in, TENS of millions of people (many parents, I would guess) will lose their insurance.
The promise of family care will be meaningless when the parent loses their plan. At that point, either it will be insurance for all individuals or family insurance provided by the exchanges which will cost an astronomical amount.
Obama hasn’t veered from his predictable plan one iota. He sees the whole world through a racist lens and because of that he will use his nationalization of our healthcare to apply affirmative action to medicine, mandating that his favored race(s) receive the first and best care at no cost to themselves. And his most disliked race(s) will pay for it, while be openly discriminated against in their own needed care. Applying his Chicago gangland politics to healthcare, he will deny care to those who support unfavored political groups, or who vote Republican. Wait and see. I guarantee it. And if Hillary wins next all that will shift is that women and lesbians in particular will be favored over black people instead of the other way around. But either way, it will be used to hurt white males as much as possible, while charging them for as much of it as possible.
Don Carlos,
Remember those audio files that are always run in slow motion or 5 seconds behind the subtitles?
People like Ezra are kind of the permanent incarnation of that “feature”.