Obamacare May Fail to Sign Up the Young and Healthy

I keep six honest serving men

They taught me all I knew);

Their names are What and Why and When

And How and Where and Who.

Rudyard Kipling (1856-1936)

Journalism celebrates the five “Ws” but the secret of our profession is that many of disdain the fifth “W” – “why” – as if accurae analysis is somehow wooly and inferior to accurate transcriptions of simple facts like “who,”“what,” “when,” and “where.”

Holman Jenkins, Jr., “The Young Won’t Buy ObamaCare,”  Wall Street Journal, June 18, 2013

Even the most optimistic among us knows with certainty that the implementation of Obamacare is falling behind schedule.  The health exchanges are not going to ready by October 1, 2013, their launch date, only 17 states say they want to run their own exchanges,  the federal computer systems are not anywhere capable of processing the 2 million people expected to be covered by the exchanges, and most big insurers are unwilling to take the risk of participating in the exchanges.

What wrong here?  One big reason is that observers favoring Obamacare has not stepped back to ask “Why? Or more precisely “Why Not” To succeed, the exchanges have to sign to healthy young people to keep premiums of older folks lower.  Samuel Alito, the Supreme Court Justice points out the obvious reasons “Why not””  young adults pay an average of $854 a year for health care.  Obamacare would require them to buy policies that cost roughly $5800 a year.  That’s a 6.8 fold jump. Says Alito, The mandate is forcing these people to provide a huge subsidy to the insurance companies.. to subsidize services that will be received by someone else.”  The reaction is likely to be, “No thanks. I’ll pay the $95 penalty.”

Another obvious example is “why” patients seek care when they know health costs are exorbitant. The reason “why,”  of course, is that someone else – the private insurer, the employers, Medicaid, Medicare, or the VA is paying the bill. Many of the these folks and the “uninsured”, whose bills are being absorbed by hospitals,  are getting a good deal.  These factors drive up health care inflation and taxes since there is no “free lunch,” and are something the government is unlikely to "fix.”  Instead government drives up costs with more regulations and more promises of “comprenhensive,” and of course “essential benefits,” an argument that may  be lost on the young, the unhealthy, the unemployed, and the pragmatic.

Tweet:  Unprepared health exchanges are waiting to see if the young will sign up for policies calling for a 6.8 fold increase in their health costs.