Young and Uninsured? Obamacare Won't Help You, and Here's Why


A recent memo by the Congressional Research Service highlighted how Obamacare has missed over half of its implementation deadlines. The haphazard nature of its implementation is not the only reason to be concerned. It is priced too high, and its mandates are too expensive for the uninsured. Even with subsidies, the impending law won’t accomplish its goal of lowering costs and helping the uninsured get better care. There are empirically proven ways we can drive costs down and provide better care, but it requires moving from the inflationary fee-for-service model we currently have to an alternative distribution system. When it all adds up, this is a solution that Obamacare cannot provide, no matter how many delays and subsidies get sutured onto its limping husk. 

Obamacare is and always will be the embodiment of collusion between the government and special interests. It is already responsible for spikes in prices for high-deductible plans, the kind of plans young, uninsured people need most. It gives insurance companies billions in taxpayer money by subsidizing 35 million people. But startlingly, the Oregon Medicaid study showed that having insurance doesn’t mean you become healthier. The study found that government-provided health care programs similar to Obamacare showed no “significant improvements in measured physical health outcomes in the first two years,” yet increased use of health care services. The positives shown in the study highlighted a rise in the rates of diabetes detection and management, lower rates of depression, and reduced financial strain. 

However, there isn’t much proof that these positives are due to health insurance. It's just as likely they could be due to the act of receiving care, regardless of delivery method or payment. As shown in numerous studies, the fee-for-service model of traditional plans encourages increases in the usage of health care services. The increased use of these services will fundamentally drive up prices of primary care as the demand increases with no increase in the supply of doctors and other health care providers. In order to combat this increase, providing more care will not decrease prices, but individualized, choice-driven, and specialized care will. Another solution to combat this increase in demand would be to increase the use of nurse practitioners, who are capable of delivering the same quality of care in most instances. But without changing both the delivery and payment model, the status quo will remain.     

Using the Kaiser Permenente Subsidy Calculator, an 25 year-old non-tobacco user making $33,000 (287% of the federal poverty level) with no employer coverage is eligible for an $18 subsidy on a $3,030 insurance premium. According to the Bureau of Labor Statistics, this individual makes about $12,000 more than the average cost of living in America, pre-tax. If the average tax burden is around 20%, or $6,600, where is this individual coming up with the money to pay just the premium? Why go for an $18 subsidy towards a $3,030 plan when you could pay the $95 individual-mandate- ax in 2014, which increases to $695 minimum in 2016? When paying a penalty becomes the best economic option, we punish people for not being able to afford an inflated product, and that’s exactly what Obamacare is doing. When the median income for blacks sits at $32,000 and for Latinos at $27,666, we aren’t helping income disparities between races and we most certainly aren’t helping upward mobility for minorities and young adults.

Seemingly unnoticed on a national level, there is an alternative insurance delivery and payment model that has achieved reduced costs and more specialized care. The spending-account model implemented by Gov. Mitch Daniels in Indiana, which provided a health saving account (HSA) option for state employees, was further expanded to low income citizens and resulted in an 11% reduction in state health care spending. In this system, the state, or provider, pays the premium, and deposits $2,750 for unsubsidized users and about half into a savings account controlled by the individual. The insured pay cash for their services, and in a win-win for everyone, paid 61 cents on the dollar, driving down the cost of care for others. Given the health care entitlements beginning their sprint towards insolvency, a Health Savings Account will be a much better value for the younger generation, as it incentivizes individualized care, facilitates upward mobility, and transfers power from the insurance companies to the insured.  

Unfortunately, HSAs are not allowed in the Obamacare exchanges. The resulting changes have caused premiums in Indiana to climb 71%. We can’t make doctors appear out of thin air, and we don’t give them enough visas to stay after they graduate. We most certainly can’t fix the medical care provider supply with the high cost of medical malpractice insurance (which Obamacare didn’t touch), the high cost of a medical education, and the financial struggle to maintain a successful practice. These burdens will only increase as more people get health insurance. 

In a move that shocked no one who has been following the bill, Senate Majority Leader Harry Reid admitted that this is a step towards a single payer system. Obamacare will need to be euthanized because it will become too expensive for everyone, and the idea that it is a step towards single payer is a sick joke to people who have to bear the costs. But moving to single payer will not solve these problems either. We will still be stuck with a dwindling supply of doctors, increasing prices, and decreased quality of care. Nothing can change the laws of supply and demand.