Disinherited. Diana Furchtgott-Roth
unlikely to feel the same enthusiasm. It is unfair to ask young people and these other groups to subsidize the maternity care of middle-aged people, especially considering that middle-aged Americans saw the smallest premium increases from the law. Additionally, young singles typically have a lower household income than that of couples who have decided to have children.
Out of households in the top 5 percent of incomes, more than 80 percent are married-couple families. Only 4 percent are males living alone, and another 4 percent are females living alone. On the low end of the income scale, 17 percent of those in the lowest 20 percent of incomes are married-couple families, whereas 57 percent are either males or females living alone.13
By requiring all health-insurance plans to cover these benefits that Washington deems “essential,” the ACA also reduces competition in the insurance market, which has the dual effect of raising prices and reducing quality. Never mind that it is unlikely that unelected bureaucrats working for the Department of Health and Human Services will know what is best for individuals. The point of private insurance is for people to choose the plan that works best for them, not for other people to tell them what they can and cannot buy.
In a competitive market, health plans that offer maternity care and other specific benefits will endeavor to do so for a low cost relative to value; otherwise, customers will simply purchase plans that do not include those services and pay for those expenses out of pocket. But if everyone is mandated to buy coverage for maternity care, then insurance companies have less incentive to keep expenditures on maternity care down, and costs will rise for enrollees.14
Purchasing insurance through the ACA is more like buying electricity from your local electricity company than buying insurance. With electricity, as with other utilities, you have a set service at a set rate and the company’s profits are determined by the government. With life insurance, auto insurance, and home insurance, a variety of products are available and companies compete to sell them. With the ACA, it is the government that determines the products that are on offer. This is not true insurance.
An estimated 4 million people, many of whom are young, will pay the fine for failing to purchase approved health insurance in 2016.15 In 2014, the individual-mandate penalty was $95 per year (rising to $695 in 2016), or 1 percent of income if that amount is higher;16 the average monthly premium for the lowest-level “bronze plan” for a 27-year-old was $226.17 This means that young people with average annual health-care costs of $600 will pay more than $2,700 per year just for insurance premiums.18 So overpriced is insurance under the ACA that many would rather pay a fine and receive no coverage than buy the insurance.
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