Obamacare is a bad deal for healthy young people

Chris Conover:

Progressives are becoming increasingly concerned at the prospect of millions of uninsured young people deciding to push the easy button next year by simply paying a very small fine[1]rather than obtain health coverage. Consequently, they have turned to a new argument to get those under 30 to act against their self interest by signing up for the Exchanges. Now we are being told that Obamacare will be a good deal for young people in the long run since whatever short-term losses they incur in the form of higher premiums will be more than made up later when they are older and get to pay lower premiums than they would in today’s market.

But those making these arguments haven’t offered any analysis to back up their claims. The conceptual point evidently is supposed to be intuitively obvious. As Ezra Klein puts it:

Young people grow old. Healthy people get sick. Rich people become poor. The people overpaying to keep costs low today are the people underpaying 10 or 20 years from now.

As a health policy skeptic, I know that lots of intuitive ideas—such as thatprevention saves money—turn out to be false upon closer examination. So when I did some actual analysis of this latest idea, it did not surprise me to learn that this claim is dead wrong. Once the time value of money is taken into account, the average young person will be worse off under Obamacare even if they live long enough to be a near-elderly person who pays premiums that are well below actuarially fair rates.

A recent study by the National Center for Public Policy Research shows that:

• About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty.
• More than 3 million will be $1,000 better off if they go the same route.

Consequently, many more will opt to pay the extremely modest tax rather than fork over many thousands of dollars to purchase coverage that became substantially more expensive for young people thanks to the misguided pricing rules imposed by Obamacare. The risk that the law will fail in an “adverse selection death spiral” thus has gotten much larger. This claim is not in dispute. Instead, progressives argue it is too narrow. If only young people would consider the long run—when they too are old—they would discover that enrolling in Obamacare is in their self-interest.
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There is much more.

He goes own to prove that even in the long run it program is not a good deal for the young.  Perhaps as this part of the program kicks in the young will start to realize how much they have been screwed by Democrats, but I am not optimistic that they can do the math.   They have been misled by the liberal education establishment for so long they have not developed the talents for critical thinking.