Jonathan Cohn, writing in the The New Republic, gives six reasons for his belief that a sufficient number of young and healthy adults will buy health insurance once the ACA "obligation" goes into effect. I really recommend reading the whole article, but I've copied the highlights below:
1. The penalty will get bigger than it is next year. It’s true that the penalty for carrying no insurance is just $95 in the first year, which is a lot less than the full price of health insurance. But the penalty actually gets larger in 2015 and 2016, so that’s eventually $695 a year for a single adult, up to $2,085 a year for a family, or 2.5 percent of household income (whichever is greater). That won’t make much difference in the law’s first year, but it will make a difference afterwards—and insurers calculating their premiums can plan based on that increase.
2. The difference between the penalty and premiums isn't the only thing that matters. “A simple comparison of premium versus penalty is not the accurate way to look at this,” says Linda Blumberg of the Urban Institute points out. She's right. Insurance premiums cost a lot more than the penalty, but if you pay those premiums you are also getting something for the money you spend: Financial protection in case of illness or injury.
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3. Young people worry about getting sick and paying the bills. Everybody puts a different value on financial security and access to medical care. But two new surveys tell us something about how young people, as a whole, think about insurance.
One survey, published on Wednesday, came from the online newsletter Morning Consult. The poll measured interest in buying health insurance through Obamacare’s exchanges and, conveniently, the pollsters broke down responses by age. In the survey, about 40 percent of young people said they were “about certain” or “very likely” to buy insurance, while another 40 percent said they were “about 50-50.” Only about a quarter of respondents said they were “not too likely” or “not likely at all” to get insurance.
The other poll, published in June, is from the Kaiser Family Foundation. Eighty-seven percent of young people surveyed said they considered it “personally important” to get insurance, 88 percent said “insurance is something I need,” and 66 percent said they worried about paying medical bills in case of injury or illness.
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4. Most young people aren’t making $32,000. If you’ve followed the debate about “rate shock,” then you’ve read a lot about young people making around $30,000 or $35,000—people who have insurance now, but will end up paying more for it because they’ll no longer get the same preferential pricing insurers offer today. But young people making less than that will almost always qualify for subsidies that discount the price of insurance. And for those who earn a lot less, the discounts will be pretty big. According to the Kaiser Foundation’s subsidy calculator, a 25-year-old making $20,000 a year can expect to pay about $503 a year for a bronze plan. That's just $42 a month.
Obamacare critics frequently dismiss the impact of these subsidies, saying that they will benefit only a “narrow slice” of the population. But the slice isn't narrow! Median income for a 25-year-old is right around $25,000. And about a third have incomes below $23,000 a year, according to an analysis by health policy researchers Adrianna McIntyre and Josh Fangmeier.
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5. Outreach can make a real difference. Precisely because many currently uninsured people can't even think about getting insurance, many won't think about it under Obamacare—unless somebody tells them about the insurance options and federal subsidies available to them. This is why the Obama Administration and its allies are investing so much time and energy into outreach, with a particular focus on young people.
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6. Not every young person needs to sign up in the first year. Critics looking for counter-arguments to each of the factors above won't struggle to find them. Some young people won’t qualify for subsidies, they'll say, and some who do will decide the coverage still isn't good enough to justify the expense. Marketing will help, they'll acknowledge, but advertising and community outreach can do only so much. And you know what? They're right. Plenty of young people will act exactly the way the skeptics predict—they’ll check out the insurance options, decide they’re not worth the expense, and pay the penalty instead.
But that’s hardly the death blow that the skeptics seem to think. In order to work as intended, Obamacare doesn’t need every eligible young person to sign up. It doesn’t even need a majority. The Administration estimates it needs only about 2.7 million young people to enroll. Exactly how they calculated that number is unclear, but it’s not a precise, make-or-break figure anyway. It’s a simply a goal that reflects a rough sense that about a quarter to a third of all people signing up for Obamacare should be relatively young, or at least relatively healthy. (McIntyre broke down these numbers recently at the Incidental Economist blog.)