As the initial technical issues with Healthcare.gov are resolved, another concern about the policy itself is becoming apparent: healthy young people don't want to pay for healthcare. According to an article from CNN, only around 3% of the target 7 million people have signed up for healthcare under Obamacare. Of these, only around 21% are in the 18-35 age bracket, with the target being 38%. The penalty for failing to sign up under an approved plan by 2014 is $95 or 1% of gross income that exceeds $10,150, whichever is larger. This penalty will sharply increase in subsequent years. If this cost grows large enough, even young citizens will eventually find it worthwhile to sign up.
In effect, the insurance companies have the national government incentivizing everyone to buy their services. If we accept the theory of regulation posed by Stigler, this is not a coincidence. Indeed, this video created by PBS states that the chief lobbyist for the insurance industry said that she would support a healthcare bill only if it included an individual mandate. The healthcare industry knew what it was getting when it agreed to participate in the healthcare "marketplaces" established under Obamacare. They were aligning the desires of the controlling political party to see the policy succeed, with their desire to expand the number of people buying healthcare. Now they get young, healthy people with low expected costs for healthcare who would have otherwise been out of reach.
It will be interesting to see how the profits of insurance companies change over the next few years as the penalties for being uninsured go up. My guess is, they grow.
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