Thank goodness we have a media industry dedicated to keeping people informed on the issues! After cheerleading for ObamaCare since last summer, the New York Times waited until three weeks after its passage to point out that the same approach in New York had driven up premiums and costs for medical care. Today, they continue their dogged pursuit in speaking Truth to Power — now that Power has already triumphed — by pointing out that the individual mandate that supposedly will help contain these problems won’t be effective, either:
William Mann of Pittsburgh earns just enough to get by. He is 46, doesn’t own a car, hasn’t taken a vacation in three years and hasn’t had health insurance for most of his adult life.
He is just the kind of person who should benefit from the health care overhaul, and he is, in fact, eligible for heavily subsidized insurance that will cost him an estimated $1,845 a year, while the government contributes about $2,756.
But Mr. Mann says he still can’t afford it. He lives too close to the edge, and won’t be buying insurance, even though he will face a fine under a provision called the individual mandate, which penalizes most Americans who don’t buy coverage starting in 2014. The requirement is one of the most controversial aspects of the overhaul.
“I just can’t put that kind of money out for a ‘maybe’ — maybe I’ll get sick and use it,” said Mr. Mann, who makes just over $25,000 a year as an administrative assistant at a small wine distribution company. “That’s a lot of money.”
Indeed it is, especially for those who don’t need that kind of access to health care. Even with the subsidies, Mann would have to spend about 6% of his gross annual income for the insurance that will likely not give him $1800 worth of services. That’s even more true of younger, healthier workers who will have to essentially provide their income as subsidies for older and less healthy Americans.
Healthy, younger people would do better paying cash for the routine medical services and buy catastrophic health insurance on the low-percentage chance they need hospitalization. That’s why Congress created health-savings accounts, which allowed people to put aside pre-tax income to use for routine medical care. Catastrophic insurance would cost pennies on the dollar compared to comprehensive premiums, which Mann and others in his income bracket could afford much more easily than the comprehensive plans imposed by ObamaCare.
Instead, they’ll simply opt out and pay the penalty rather than saddle themselves with a big bill that delivers next to no value at all. What will that do to the system? The Times quotes a Heritage Foundation economist to ask the question:
But Edmund F. Haislmaier, senior research fellow of health policy studies at the Heritage Foundation, a conservative research group, said he was skeptical that so many uninsured people would actually start buying insurance. “We’re premising all this on the idea that we’ll cross-subsidize older, sicker people with a lot of young healthy people, whom we assume will buy the coverage,” he said. “But what if they don’t?”
If they don’t, insurance companies will have to raise premiums rapidly to cover the costs of higher-risk patients entering the pool. It’s a great deal for those consumers, who suddenly get to shift their costs onto the other members of the pool, but the healther consumers will not be able to keep up with the premiums. Or, alternatively, states will disallow premium increases — which will put the insurers out of business.
None of this is exactly breaking news. Many of us warned of these consequences since June 2009, when the first versions of ObamaCare floated out of Capitol Hill. Had the New York Times indulged its journalistic curiosity when it counted, perhaps this could have been made even more clear before Congress approved ObamaCare, and not a full month later.