The free-market American Action Forum (AAF) found that in Obamacare’s first year, 6 out of 7 uninsured young adults will pay less if they go without health insurance than if they enroll in Obamacare. As Obamacare’s individual mandate tax penalty rises drastically over the next several years, the proportion will only slightly decrease to 71 percent in 2015 and 62 percent in 2014.
Analyzing data collected from a 2011 Medical Expenditure Panel Survey Household Component — a large-scale, nationally-representative, household survey collected by one of the Department of Health and Human Services’ own agencies — AAF discovered that paying out-of-pocket for health care will overwhelmingly cost “young invincibles” less overall.
“We’re talking about a population of people who chose to go without insurance when it was much more dangerous to be without insurance and when insurance actually cost less,” the study’s co-author Chris Holt told The Daily Caller News Foundation. “So the incentives have changed so that these folks now have less risk in remaining uninsured while the cost of getting insurance is even higher.”
The Obama administration is already facing a tough final two months in Obamacare’s open enrollment period. Reports on Obamacare enrollees this far have indicated that young enrollees and the uninsured are vastly underrepresented in the exchanges.
Just 24 percent of exchange enrollees were between the ages of 18 and 35 years as of December 28; the Obama administration had repeatedly outlined that the exchanges will need 38-39 percent of enrollees in that range in order to keep costs down.
As for the uninsured, Obamacare’s enrollees tend to have purchased exchange coverage after having plans cancelled or have switched over to access taxpayer subsidies.
The study’s authors Conor Ryan and Holt told TheDCNF that Obamacare is simply making even stronger incentives for young Americans not to get coverage.
Even as Obamacare’s individual mandate penalty for not purchasing insurance rises in the next several years, a majority of young adults will still benefit from remaining uninsured, according to data on the group’s past health care spending. While the tax penalty is just $95 in 2014, it will jump to $325 in 2015 and $695 in 2016.
But Obamacare’s tax penalty stops increasing there. After 2016, Holt told TheDCNF, the law will make it “increasingly discouraging” for young adults to purchase health insurance, “in part because of rising premiums and subsidy indexes.”
The amount of taxpayer subsidies will somewhat level off, according to AAF models. By 2019, exchange participants that receive subsidies will see their payments increase by an estimated 25 percent. From 2014 to 2023, AAF projects that premium contributions will increase by 75 percent, disincentivizing young adults and low-earners.
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