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Article can be found at http://www.crainsnewyork.com/article/201..._CARE/131119989
Buying Obamacare

Still uninsured
For now, the penalty to stay uninsured (1% of a taxpayer's income in 2014, more in future years) is still a fraction of what young people would spend on insurance.

Irina Ivanova


Buck Ennis
Irina Ivanova considers her options under Obamacare.
Published: November 11, 2013 - 12:54 pm

Since I met with a navigator a week and a half ago, I've been dragging my feet. I can sign into the exchange. I know what the plans are, and what they cost. I know what my subsidy is. (Turns out I'll qualify for $43 a month, not $32 as I thought before--which goes to show than anyone looking for Obamacare coverage should talk with an accountant about what your modified adjusted gross income will really be.)

The technical challenges of getting answers only delayed my grappling with the fundamental issue. It's not impossible to get coverage, but for someone with my income it's expensive. Even with my increased subsidy, I'd pay $264 monthly for the cheapest Bronze plan. While a range of primary care services is covered, I would still need to pay down the deductible to use the prescription benefit--which brings my yearly spending to a minimum of $6,168. That's just a notch below what I pay in rent for a year.

I don't have a problem with paying for medical care. But I'd get less care were I to buy health insurance than I pay now out of pocket. It costs me $10 a month for one generic medication, and $125 every quarter to see the doctor who prescribes it. My yearly medical spending hovers around $500.

Yes, the insurance options the Affordable Care Act created may cover more than my plan would have before. But that also means higher premiums. And I'm not trading up from a crappy insurance plan—I'm going from zero to sixty in a second. And it feels a little too much like extortion.

I do understand, as many people have told me, that I could get hit by a van—or suddenly develop cancer. But I also keep thinking of a conversation I recently had with Lower East Side stalwart Dr. Dave Ores, who has never taken private insurance.

"There's no such thing as accidents," he told me. "We have a thing called actuary statistics. You know, every year, how many broken hips there will be in a particular place. You don't know who's gonna break their hip, but you know for a fact it's going to be, say, 300, and you know how much it costs."

He went on.

"That's what private companies exploit, that little moment right there—that YOU might break your hip. So I'm collecting $48 million a year to cover a $300 problem."

That's the way insurance companies make money: by taking in more than they have to pay out in claims. That's exactly why young people are vital to making the ACA's economics work. Young people, with low medical use, will pay into Obamacare much more than they get out of Obamacare, and our premiums can be used to offset the health costs of sicker Americans.

We'd save a lot of money, and a lot of bureaucracy, if we applied actuarial statistics on a national scale—as other Western nations did long ago. Figure out the cost of medical care for all your citizens, divide that amount among them and then extract it via taxes. The penalty to stay uninsured (1% of a taxpayer's income in 2014, more in future years) is a roundabout way to achieve the effect—though Obamacare won't result in anything near universal coverage. My penalty, of up to $410 next year, is still a fraction of what I'd spend on insurance.

When the penalty rises in future years, I might reconsider my choice not to get health insurance. But for now, Obamacare is just not a good buy.

[Editor's Note: "Buying Obamacare" is an ongoing series that tracks the efforts of Crain's freelance health reporter Irina Ivanova to buy health insurance through the New York State Exchange. As a 28-year-old with no pre-existing conditions, Ms. Ivanova falls within the age band of "young invincibles" the exchanges must attract on a large scale to make health insurance expansion financially viable. By spreading out the insurance risk between high-risk individuals who have been unable to buy coverage, and healthy young people who have avoided doing so, the ACA hopes to contain insurance costs.]

Earlier posts in this series include:

Nov. 6: Where are all the young people?

Nov. 1: A key question gets answered

Oct. 29: Love provides a loophole

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