The 700 Million Dollar Guilt Trip

The Obamacare sales machine is in the process of spending approximately $685 million of your money to guilt you into paying too much for health insurance. 

Why is the push even necessary? Why doesn’t Obamacare sell itself? Because it’s not a good deal for most people.

In order to keep insurers in the exchanges, Team Guilt has to make it nominally profitable to be in the program. To do that, they need to get young, healthy people to buy health insurance and not use it.

The key to getting young, healthy people who don’t need health insurance to buy health insurance, Obamacare advocates have decided, is getting moms to make the case to their darling 20-somethings. 

The basic problem is a misunderstanding of what “affordable” means. Under Obamacare, “affordable” insurance is anything that takes less than about 9% of your income. But that’s a linear approximation of a nonlinear variable.

(What’d he say?”) 

It’s just this: 9% of the income of someone struggling along at $20K/year is nothing like the same as 9% of the income of someone making $50K/year. While $150/month is obviously less than $375/month,  there might be more room in the budget for the $375 than the $150.

But, advocates are quick to point out, the exchange insurance is subsidized. That implies the insurance will be free, but it won’t be. 

You can see the subsidies provided and the cost of insurance with Covered California’s calculator.

I’m not sure people in the DC corridors of power realize what it’s like to run a household on $15K or $22K/year. The subsidized premiums ($64 for a 25-year-old couple making $22K) are still more than I’d want to pay out of that paycheck, when you still have hefty expenses if you get sick. Likewise, for a 50-year-old couple making $50K to pay $400/month is unlikely — unless they have known health problems.

Why would anyone currently uninsured who makes too much to get a subsidy decide to buy the more expensive Obamacare kind? They won’t, in any significant numbers.

Hence, the Great Guilting of 2013. The fact that Obamacare advocates are using a guilt trip means they lack a simple economic case to make, even though people mostly accept the need for health insurance.

Ezra Klein and Sue Kliff wrote about the Trip from inside the White House:

When they asked a recent focus group whether a $210 premium was affordable, only 29 percent of likely marketplace enrollees said yes. Then, Undem and Perry phrased the question a bit differently. They told the focus group participants that, with their tax credits, they would save “$1,908 a year compared to what you would pay on your own.”

All of a sudden, 48 percent of the participants thought that insurance was affordable. But 48 percent is still less than half.

See, here’s the thing: for people who say $210/month is not affordable, $210/month is not affordable. It doesn’t matter how you phrase the survey question. Most people in that situation won’t commit to spending a car payment on the luxury of having a doctor of their own, instead of whatever they get at the ER

If you do get them to sign up, they’re going to look at their checkbook (or ATM balance) at the end of the first month and say, “I need groceries. I need a haircut. The car is out of gas. The dog got sick. I could use $200.” And then they’re going to realize that they don’t need health insurance all that much, anyway. 
Back to Kliff and Klein:

“If we were having this debate last year, the pundits would be saying that ‘it’s not clear Obama will get young people out to the polls again, it’s not clear if African Americans will turn out to vote’,” said Nancy-Ann DeParle, the former head of the White House Office of Health Reform and deputy chief of staff to Obama. “Well, guess what? As Barack Obama has repeatedly shown, he knows how to get people out. And I think they will turn out to enroll in health plans just as they did to vote last November.”

Getting people out to vote is not the same as getting them to spend money.

Having trained the electorate for decades that government was there to provide for them, and their job was to vote, it remains to be seen whether Team Guilt can get people to part with real money to buy health insurance they don’t need and can’t afford.

The only way the administration can convince young, healthy people to spend too much for insurance is to bribe them with subsidies — and let them lie about their incomes. The numbers don’t work out, however. 

As John Goodman notes, 25% of people eligible for Medicaid don’t take it, and it’s free.  And similar numbers of people don’t get employer-based health insurance, which is a better deal for them than the exchanges are going to be.

My hunch is that very few people are going to sign up for the exchanges, even without income verification and with their kids coming home from school saying it’s a bargain.

But none of that really matters. If not enough healthy people sign up to make it profitable for insurers, a way will be found to continue the program regardless. To the administration and the left guilt industry, all that matters is establishing the program, after which they believe it will be impossible to repeal.

Obamacare should be fully repealed, using whatever parliamentary tactics it takes — even if those tactics cause short-term interruptions to government services. Defunding the law using the Continuing Resolution is a good first step. Until Obamcare is fully repealed, Americans should simply refuse their ticket for the Guilt Trip.

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