Subsidies are one way in which the administration hopes to entice young people to sign up. But if that doesn’t work, they hope the threat of a financial penalty will be enough to compel them to purchase insurance.
However, in 2014, the mandate penalty is $95 or 1 percent of taxable income, so it isn’t a very powerful stick. For the plan referenced above, the cost of premiums would be higher than the cost of the mandate, even for somebody earning $20,000.
For somebody earning $35,000, premiums on the ConnectiCare plan would be nearly $2,500 annually, while the mandate penalty would only be about $250.
Thus, even if administration officials can fix Obamacare’s technical problems, they may have a hard time convincing young and healthy Americans to purchase insurance.