Thursday, March 13, 2014
A single chart shows how doomed Obamacare relies on the victimization of young males to succeed
It should be apparent by now that the government's attempt to take over and micromanage one-sixth of the American economy is a complete and total flop. Obamacare will fail, and it should fail. The chart above, from the ACA Death Spiral website, shows why.
One of the myriad faults with Obamacare is that it limits or outlaws all insurance ratings, save for those based on geography. Age ratings are permitted in part. Older patients cost as much as five times as much to insure as younger ones, but Obamacare imposes a 3:1 maximum premium differential. In other words, young people just starting out in life are forced to subsidize their wealthier elders.
Oddly enough, liberals don't seem to care about premium differentials when it comes to auto insurance. The differential is often huge: young males pay premiums several times those of older females. If we are going to limit age differentials in insurance, shouldn't we do so for all types of insurance? Shouldn't we require all citizens to purchase auto insurance, whether they own a car or not?
The chart above shows that roughly 50 percent of premiums paid by younger males will go to provide free insurance coverage to other groups, a subsidy being a form of free care. Consider the fact that 20 percent of insurance benefits are actually overhead costs and young males as a group will receive only 40 cents of medical care for every dollar in premiums paid.
But wait there's more! I'm operating on guesstimate here, but we've all observed that in any group the bulk of medical costs are incurred by a relatively small number of individuals. Using a proper rating system I dare say that out of a group of 100 men I could identify 10 up front who would be likely to consume 50 percent of the group's medical services over the next year.
Technically insurers are allowed to charge a smoker's premium under Obamacare. But those who lie won't have their policies cancelled or coverage denied. With Obamacare, those who engage in risky health behaviors now have their costs passed over to the healthy. So the Type 2 diabetic who weighs 300 pounds, drinks like a fish, and chomps on pork chops and pies all day won't have to pay a dime in extra insurance costs. His costs are covered by gouging vegetable-eating joggers.
I suspect that when you factor out the costs of the intentionally or unfortunately ill, you'll find that young, healthy males will receive less than 20 cents in health-care benefits for every dollar paid in premiums. For young males -- and males of most ages really -- Obamacare is a sucker deal.
The Obama administration has been in an all-out effort to get young people to sign up for Obamacare. And many administration officials have been up front about why these younger signees are needed: to subsidize health care for those being sold discounted health plans. The president is actually making (bad) comedy videos in an effort to woo the young.
But these Obamacare shills have a terrible sales pitch. It's essentially, "Hey young people, come sign up for insurance so we can charge you four times as much as we should and use the money to give free coverage to people who are older and wealthier than you!" Many young people will qualify for health-care subsidies when purchasing low-quality policies through the exchanges, but unless these subsidies equal 75 percent of their premiums it's a bad deal.
Suppose you were to go to a restaurant and be told that your $25 meal would cost $125 in order to provide everyone with unlimited fine wine with dinner. This might be a good deal, except for those who are satisfied with a $5 glass of wine, or no wine at all. Soon such a restaurant would find that teetotalers and cheap-wine drinkers would stay away, and it would quickly go broke as its changing customer base slurped down vast quantities of Cristal, Château Petrus, Opus One, etc., for the low price of $125 per meal. Would you go to such restaurant? I wouldn't.
Of course, with the Obamacare mindset such a restaurant needn't go broke. The government would just agree to cover the tab of any patron who drank too much expensive wine and pass on the costs to the taxpayers. But is this a rational government policy?
Should young males buy health insurance? Perhaps. They should base their decision on their own best interests and not on some stupid comedy skit by the president. If they are dreadfully ill, of course they should buy the now-partially-free insurance. If they have a substantial estate, yes. But for the average male with a modest estate a better choice is probably to buy plenty of accident coverage on one's auto policy and hope for the best.
Yes, bad things can happen, but uninsured young people can get emergency health care. If a chronic condition should surface they can wait a few months and enroll in Obamacare. And if their bills are just impossible to pay off they can declare bankruptcy and get a new start. This is the best choice young males have under Obamacare, and it's the one most are taking.
Maybe more young people could be persuaded to sign up, if only they could be shown videos like the one made by Richard Simmons, as part of the "Tell A Friend -- Get Covered" campaign (shown below). Please watch this video, young males of America! Doesn't it make you want to pay four times as much as you should to "Get Covered"?