Family Research Council

January 21, 2014 - Tuesday

ObamaCare: Only the Good Buy Young

The NBA's Chris Paul hawks everything from PowerAde to deodorant -- but ObamaCare may be his toughest sell yet. Like Magic Johnson, Alonzo Mourning, and Steph Curry, the all-star point guard is one of many celebrities who agreed to start pitching the President's health care plan to young people.

And not a moment too soon, based on the White House's latest data. After months of keeping Americans in the dark, the Obama administration finally let the cat out of the bag on its enrollment numbers. And while business certainly picked up on the exchanges before Christmas, there's still one thing missing: young people. Early on, experts agreed that the system would need at least 2.7 million 18-34 year-olds to stay afloat. That's a far cry from what the government has now. With only 2.2 million total sign-ups (and who knows how many actual premium-payers), the numbers barely scratch the surface of sustainability. For ObamaCare to work, it will take millions of healthy people buying insurance to offset the costs of the older and less healthy populations.

Like any health care system, ours needs more people pulling the cart than riding in it. According to HHS, only 24% of that 2.2 million are part of the younger generation the policies are banking on. Chris Carlson, one of the actuaries who helps insurance companies set rates, says, "It will take a pretty big shift from what we've been seeing so far to get to the original assumptions, which is what insurers based their pricing on."

And time is ticking. The enrollment window slams shut on March 31, and most aren't optimistic that HHS can close the gap -- even with the NBA on its team. Unless something changes -- and fast -- insurance companies will be living their worst nightmare. It's what insiders call a "death spiral," which is industry-speak for when the premiums don't cover the costs of claims. Rates skyrocket as a result, and the healthier policyholders (read: young adults) start dropping their coverage. So far, the law has been exactly what most pundits predicted: a magnet for sick people and a repellent for a low-risk population who doesn't need -- and more importantly -- can't afford the new costs.

For most young people, it doesn't make financial sense to pay double (and in some cases, triple) for health care they may never use when the alternative is a $95 first-year fine for not buying it. After all, the Heritage Foundation points out, "In the 43 states where 2014 premiums are rising, a 27-year-old faces an average premium increase of 72% compared to a 44% increase for a 50-year-old."

What's the incentive for paying into a system that twenty-somethings can get on-demand if they need it? As far as most kids are concerned, living without insurance is a gamble they're willing to take. Of course, that's not what the government wants to hear, especially as it kicks its Young Invincibles campaign into high gear. With commercials blanketing the Super Bowl, Valentine's Day, and March Madness, the White House is desperate to make up ground between "the young and the ObamaCare-less."

Unfortunately for the states, hitting the targets is a nail-biter for local exchanges too. Most people may not realize it, but insurance rates are set on a state-by state basis, so even if 44% of Washington, D.C.'s enrollment is in the 18-35 year-old sweet spot, it doesn't help Arizona, whose youth sign-ups are just 17% of the total. The Washington Post breaks it down here, along with HHS's anxious days before the March 31 deadline. Unlike ObamaCare's other snags, this one is serious. After all, the President can't rewrite people's ages the way he rewrites the law.

Abroad View of Obama Narrows

If you think the President's credibility has bottomed out in America, you should see it overseas. The White House's duplicity isn't lost in translation on key global issues, including the latest nuclear pact with Iran. According to a new poll, only 22% of Israelis believed the President when he said the U.S. would "ensure that Iran does not achieve a nuclear weapon." A whopping two-thirds of the country's voters thought the statement was untrue -- which makes sense considering President Obama's dismal 50% disapproval rating in Israel.

The once-strong alliance between the two countries hangs by a thread now, as Iran enjoys its first round of relief under the deal that lifted more than $4.2 billion in economic sanctions (a compromise Israel called "a historic mistake.") "In the final deal," Prime Minister Benjamin Netanyahu told parliament, "the international community must get the Iranian nuclear train off the track. Iran must not have the capability to produce atomic bombs." In the meantime, should anyone be shocked that the Israelis don't believe the President? Like the rest of the world, they watched him lie through his teeth when he told Americans that if they liked their health care coverage they could keep it. Five million cancellation notices later, more Americans have lost their coverage than gained it.

As far as Israelis are concerned, self-preservation means stopping Iran from developing nuclear weapons. The President's policy is more focused on stopping Iran from deploying those weapons. As experts know, the Obama approach is incredibly risky, because a nuclear weapon delivered via a cargo container in a U.S. port would have the same destabilizing and deadly impact as one launched by an Intercontinental Ballistic Missile. Either way, the mood in Israel only confirms the fears about this administration's foreign policy: our allies don't trust us, and our enemies don't fear us.

** Earlier this afternoon in New York, I had the chance to sit down with Fox News's Gretchen Carlson. Click below to hear what we had to say on everything from the Pope's latest visitor to Kanye West.

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*** Also, don't miss the latest installment of FRC's March for Life video series, "Pregnancy Resource Centers: Volunteers Make a Difference" here.

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Tony Perkins' Washington Update is written with the aid of FRC senior writers.

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