Obama: Health Insurance a 'Right'

Good news. President Obama has vastly expanded the concept of "rights" in America by decree. He told a radio audience in his weekly address that health insurance is now a "right" that every American enjoys:

Your health insurance isn’t something to play politics with. Our economy isn’t something to play politics with. This isn’t a game. This is about the economic security of millions of families.

See, in the states where governors and legislatures and insurers are working together to implement this law properly – states like California, New York, Colorado and Maryland – competition and consumer choice are actually making insurance affordable.

So I’m going to keep doing everything in my power to make sure this law works as it’s supposed to. Because in the United States of America, health insurance isn’t a privilege – it is your right. And we’re going to keep it that way.

Before we get to whether a commercial product is actually a "right," perhaps we should explain what the president forgot to mention when he said he was "doing everything in my power to make sure the law works as it's supposed to."

The truth is, the president is doing everything in his power -- as well as claiming powers he doesn't possess. By unilaterally waiving some requirements of Obamacare without congressional consent, the president is basically ruling by decree. He is claiming executive authority to make law -- a dubious, and dangerous, precedent. He is doing so because implementing the law as written would add to the chaos surrounding the law already present at the state and federal levels.

And to say that insurance is "affordable" in states that are cooperating with him is an outright lie. Just because premiums are going to increase at a slower rate than expected doesn't make insurance any more "affordable" for anyone. If it wasn't "affordable" before Obamacare, why should an increase in premiums mean it's more "affordable now"?

In fact, this study by the National Center for Public Policy Research shows the economic advantages to "young invincibles" of not purchasing insurance under the individual mandate:

Millions of young people could save hundreds of dollars a year by avoiding Obamacare’s insurance exchanges and paying the penalty, a new report examining the law’s financial incentives finds.

About 3.7 million people between the 18 and 34 years old will save at least over $500 next year if they do not buy health insurance through the exchanges, according to the study by National Center for Public Policy Research health care policy analyst David Hogberg. Of those, just over 3 million will save over $1,000 per year.

While the law has put in place two primary incentives to encourage people to buy insurance—subsidies and the individual mandate—these are not enough to make the subsidies economically worthwhile for many young people, Hogberg contends.

The report highlights a weakness with the structure of the Obamacare exchanges. If the exchanges are unable to attract enough younger people, the insurance pool will shrink and the premiums will rise, setting off a “death spiral” and potentially leading to a collapse of the exchanges.

“You need enough of these [young] people in the exchanges to in effect cross-subsidize people who are older and sicker,” Hogberg said in an interview with the Free Beacon.

The financial incentive to avoid the exchanges will be even greater in 2014 because the penalty for not buying insurance will be higher in subsequent years, the report said. The penalty in 2014 will be either $95 or one percent of one’s income, whichever is greater. This penalty will rise to $695 or 2.5 percent by 2016.

While the “Affordable Care Act” was originally designed to make health insurance more affordable, even those close to the poverty line can save over $500 by not buying insurance in 2014, the report noted. The $500 savings for an 18 year old starts at 163 percent of the poverty line and for a 30 year old at 178 percent. In 2016 the level will rise to closer to 300 percent.

There will be some people for whom buying insurance will be economically rational, Hogberg explained, but not many.

“For some people the subsidy will cover most of the cost of a bronze plan, and even when it doesn’t cover the full cost, it may cover enough so that forgoing the insurance and paying the fine is not the rational way to go,” he said.