Michael F. Cannon

Even if Obamacare really has enrolled 8 million Americans through its health insurance exchanges, that’s not good enough. For the exchanges to work, people must enroll and stay enrolled.

If too many enrollees drop out, premiums will climb until the exchanges collapse.

The experts are already worried. An estimated third of those who sign up for Exchange plans haven’t paid their first premium. In Texas, an estimated 58 percent haven’t paid. As many as 5 percent stop paying after the first month. Rising premiums and skimpy coverage may lead even more enrollees to drop out But the most important factor might be that Obamacare itself makes it safer and more attractive than ever for healthy people to drop their coverage and wait until they get sick to re—enroll.

Before Obamacare, choosing not to buy health insurance, at least for a time, was already a pretty safe bet for most healthy people. You saved thousands of dollars per year, and the odds of having unmet medical needs or unpaid medical bills were low.

Under Obamacare, choosing not to buy health insurance can save you even more, and the downside is much, much smaller.

First, the savings. Obamacare increases premiums for healthy people – in some cases, even if you qualify for a subsidy. So dropping coverage will save you even more money than before. (You can avoid the toothless penalty for people who don’t obtain coverage by ensuring the IRS won’t owe you a refund.)

Michael F. Cannon

Michael F. Cannon is the Cato Institute's director of health policy studies.
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