Rush Limbaugh and other conservative Obamacare opponents are trying to pretend they are on the side of young people when they urge them to forgo the first year of the Affordable Care Act. But in reality, they are their enemy in the long run. Here’s why.
Let’s look at the case of Lily, a fictional (yet very real) single waitress living in Columbus, Ohio and earning $25,000 a year. By taking Limbaugh’s advice, Lily would pay a $250 penalty in 2014 and have no health insurance.
And yes, $250 is lower than the $1729 per year that Lily would pay for a qualified ACA plan after the federal subsidy. So, Limbaugh argues, Lily will be saving $1479 by not signing up.
Lily is young, healthy and not planning to get pregnant, so she may rationalize that it makes financial sense to take that risk and forgo Obamacare next year.
(And there’s a reason I wrote a big “but”!)
BUT... by keeping Lily and other young people out of the market in 2014, Limbaugh’s scheme will force the cost of insurance to spiral in 2015 and 2016, when the penalties go up significantly.
In 2015, the fine will be 2% of Lily’s income, or $500. In 2016 and every year after, the penalty will be at least 2.5%, or $625.
That’s a lot of money for Lily to spend to NOT get a product.
And when Lily is 30 or 35 and realizes she does want health insurance – that she does want to be covered for unexpected illnesses, pregnancy and hospitalization, that she does need expensive prescription drugs or maternity care, that she would rather pay for health insurance than risk losing her new house in a medical bill induced bankruptcy – Lily will go to the ACA exchange and find that insurance costs have skyrocketed far beyond what those same plans would have cost her in 2014.
That’s because by keeping younger, healthy people like Lily out of Obamacare now, the insurance companies will have to mark up their prices to reflect that market.
And when the Lilys of the world aren’t as young and healthy anymore, the yearly cost of their insurance will be so high that it will dwarf the $1479 that Lily “saved” in 2014.
So, fictional Lily – and all the real Lilys out there – if you think Rush Limbaugh is your friend in the healthcare debate, you are wrong. Limbaugh is only out to advance his political agenda. Your finances and your health are of no concern to him. None.
Listening to Rush Limbaugh on this issue is financially akin to drinking the Kool-Aid at Jonestown. The charismatic guy with the megaphone doesn’t want to save you from the world. He wants you to commit financial suicide so he can wrack up a big body count to prove a point.
With his $370 million net worth, Limbaugh doesn’t worry about his escalating healthcare costs. He will be just fine in 2016.
The question for all the real Lilys of the world is, what will be best for you by then?