Young Healthy People Should Not Have Health Insurance

A few days ago, in a post entitled "Medical Insurance Is About Asset Protection, Not Health," I Iinked to the report of results from the recent randomized Oregon study of increased Medicaid enrollment -- results showing that providing medical insurance to people leads to greatly increased expenditures on medical care without any demonstrable or measurable improvements in health.  But I did not fully draw out the implications of those results.

If medical insurance does not improve health results, then its purpose is asset protection.  That's a perfectly good purpose -- if you have assets to protect.  But what is the consequence for a young, healthy person with no substantial assets?  Very simple:  you are a fool if you buy health insurance.  If you have some routine medical expenses, pay for them out of pocket, and skip the huge contribution to the old and the sick that you would have to make by buying insurance, let alone the insurance company's overhead and profit.  If you get really sick, show up at a doctor or hospital and demand care.  It will be provided.  They will send you a bill.  You can't pay it.  Offer them what small amount you can pay.  If they don't take it, declare bankruptcy.  In bankruptcy, you will have to give up whatever substantial assets you have (by definition, not much) and then you will get a discharge.  Whether you ended up getting sick or not, you will have saved many years of real money going down the rat hole of health insurance.  A few years, or maybe ten, from now, when you have a spouse and a kid and you're buying a house, it's time to think about medical insurance.

In fact, many young Americans are fully smart enough to make this calculation, which is precisely why we have had the non-problem of 40+ million "uninsured" for many years.   Now enter Obamacare.  Starting January 1, 2014 a minimum level of health insurance is "mandated."  What now?

In case you haven't figured it out, at its heart Obamacare is a scam to force the young and healthy to subsidize the healthcare of the older and less healthy.  If you are young and healthy and think about it for a few minutes, you will realize that you want no part of this.  How to escape?

The good news (as noted here by Richard Epstein) is that it appears that the tax penalties for not having health insurance will be far less than the cost of the health insurance.  The decision is then obvious.   Pay the penalty.

Advocates for Obamacare are starting to figure this out.  Thus, on the same day as my previous post on this subject (May 6) we have one Ezekiel Emanuel writing an extremely bizarre op-ed in the Wall Street Journal entitled "Health-Care Exchanges Will Need the Young Invincibles." If you don't recognize the name, Ezekiel Emanuel is a "medical ethicist," brother of Rahm, and thought to be a major designer of Obamacare.   Emanuel identifies what he sees as the problem:

Here is the specific problem: Insurance companies worry that young people, especially young men, already think they are invincible, and they are bewildered about the health-care reform in general and exchanges in particular. They may tune out, forego purchasing health insurance and opt to pay a penalty instead when their taxes come due.

Actually they're not "bewildered" at all, but rather completely rational and making the obvious and sensible decision.  But Emanuel has what he thinks is the solution:  an appeal to civic duty! 

[W]e need to make clear as a society that buying insurance is part of individual responsibility. If you don't have insurance and you need to go to the emergency room or unexpectedly get diagnosed with cancer, you are free- riding on others. Insured Americans will have to pay more to hospitals and doctors to make up for your nonpayment. The social norm of individual responsibility must be equated with purchasing health insurance.

Well, good luck with that.  Here's a little news for Mr. Emanuel:  The principle of "from each according to his abilities, to each according to his needs" does not work as a method of organizing affairs in human societies.  Also, that principle is the opposite of the principle of "individual responsibility."  So the idea of "equating" a massive wealth transfer from one group to another with "the principle of individual responsibility" is a ridiculous example of doublespeak.  Also, get over that "free riding" nonsense.  If Obamacare (and before it all kinds of other regulations and stupid tax treatment) did not make health insurance ludicrously overpriced for young people, they could and would buy it.  You're trying to scam them, and they are too smart to get taken in. 

Now why (as Mr. Emanuel points out) Obama won the 18-29 age cohort by a 23% margin, I cannot explain.  But I can predict with a great deal of confidence that when called upon to waste several thousand dollars a year each, year after year, in a supposed act of civic responsibility that is really a scam, they are just not that stupid.