Should You Opt Out of Obamacare?

“Opting out” of the Patient Protection and Affordability Act, or Obamacare, is slightly misleading. The individual mandate in the act makes it so that individuals must either purchase health insurance or pay a $95 fine. Opposition to Obamacare lost the Supreme Court case and the Presidential election necessary to repeal the new law.

Civil disobedience is the active and purposeful refusal to obey certain laws one regards as unjust. In the United States, civil disobedience was a common method of resisting the Vietnam War draft. War protestors would burn their draft cards as a way to defy draft registration requirements. Conservatives are now using the draft protests as a metaphor for their own struggle against Obamacare.

The comparison between the two social movements breaks down to the extent that Obamacare does not use draft cards. Freedomworks, a political group opposing Obamacare, has found a way around that problem by using old Vietnam draft cards with “Obamacare” written at the top. Freedomworks is encouraging young adults to burn the faux cards as a symbol of their pledge to pay the fine rather than buy health insurance. The protestors will then upload the videos online.

Why Would Young Adults Want To Pay a Fine Rather Than Buy Health Insurance? 

According to Freedomworks, adults in their twenties should pay the fine rather than buy health insurance because it is a political stance designed to exploit the weakness in the healthcare reform act. The individual mandate is the keystone of Obamacare because the mandate requires everyone, including young adults, to enroll. Before Obamacare, young adults rarely purchased health insurance on their own. They rarely needed healthcare because they are in the best physical condition of their lives.

Since the new law forces this demographic of citizens to buy insurance, insurance groups will take in huge amounts of money from consumers who never bought their services before. This in turn keeps prices low for people who do need healthcare. The elderly, the disabled, and those with pre-existing conditions can now afford insurance that was previously too high to purchase.

All of this depends on 2.7 million young Americans buying health insurance. Without them, prices would likely rise again. If prices increase, other Americans who need health insurance might not be able to afford it. If the 2.7 million young adults fail to register for health insurance, Freedomworks says, Obamacare would fail.

Should You Buy Health Insurance or Pay the Fine?

Political principle is a fine reason to oppose a new law, but principle alone cannot convince everyone to ignore their own well-being. Americans who are more pragmatic about healthcare reform will want other reasons to avoid buying insurance. Although this blog can’t make that decision for you, it can dissect the reasons why some Americans are skipping out on buying health insurance. Here is an analysis on the three reasons young Americans are not buying health insurance:

1. Obamacare is Medicaid for the Middle Class

Opposition: Most Americans dislike welfare. Medicaid is often seen as welfare. If Obamacare expands Medicaid, then it is welfare.

Facts: The Medicaid program is being expanded so that low-income people who can’t afford health insurance will be covered. Individuals who make less than $15,870 per year qualify. However, the same Supreme Court case which turned the individual mandate into a tax also allowed the states to reject the expansion of Medicaid without losing their current Medicaid funding. Several states are already rejecting Medicaid expansion; citizens in states like Texas or Wisconsin should not expect extended Medicaid coverage.

2. Obamacare is Killing Small Businesses

Opposition: Obamacare increases the costs of labor by requiring that businesses offer their employees health insurance. The increase in labor costs will force businesses to close their doors.

Facts: This depends on what counts as a “small business.” Companies with fifty or more employees must offer health insurance to their employees or pay fines. The cost of the health insurance will differ between states, depending on state implemented healthcare reforms.

Businesses with 25 employees or less making less than $50,000 can ask for a tax credit if they pay at least half of their worker’s healthcare premiums. The credit is 50% of their employee’s premiums, 35% for non-profit employers.

Finally, there are a few extra taxes. First, there is a Medicaid tax hike of .9%. Businesses making less than $250,000 will be exempt from the tax hike. There will also be a “pre-existing insurance coverage” fee of $63 per employee in 2014. The fee will reduce to $40 in 2015, $28 in 2016, and then expire in 2017, assuming Congress does not vote to extend it. This fee covers all businesses, regardless of size or profit.

3. Obamacare Uses the Middle Class to Subsidize the Healthcare of Others

Opposition: The healthy are forced to pay more so that those who can’t afford insurance will get free or heavily discounted insurance.

Facts: As mentioned above, Medicaid is being expanded to include more Americans. At the same time, the federal government exchange market is offering subsidies to low-income Americans to help them purchase insurance that the federal government offers. States using the federal exchange are states which refuse to implement a state exchange market.

Healthcare exchange markets are “markets” where insurance companies can bid for the right to sell their services to the citizens of an area. Under Obamacare, states can choose to use the federal government’s market or create their own.

Although most of Obamacare will go into effect next year, the Emergency Medical Treatment and Active Labor Act of 1986 is still alive. The act requires that anyone who enters the emergency room be treated, regardless of their ability to pay. If someone rejects health insurance and pays the fine instead becomes injured or sick, hospitals are still required to treat this person. If that happens, should that person be expected to pay for the whole bill or should the taxpayers pay for his or her medical expenses?