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Megan McArdle

Will the 'Young Invincibles' Join Obamacare?

Megan McArdle weighs the costs and benefits of Obamacare for healthy young people.

It's no exaggeration to say that if young people don't show up to the insurance exchanges in the next few months, the Affordable Care Act probably won't survive. Young, healthy people paying more than they have previously -- either because they are buying more expensive insurance or because they are buying insurance for the first time -- are the financing mechanism that makes Obamacare's insurance markets work. The administration estimates that a little over a third of the people on the exchanges need to be in the 18-to-35 range to hold premiums down to reasonable levels.

During the run-up to its passage, experts frequently talked about the "three-legged stool" of the design -- guaranteed issue, community rating and the individual mandate. Take away one of those legs and the whole thing collapses, as the market for individual insurance basically has in New York state, which passed a law saying that insurers had to offer a policy to anyone who wanted to buy one, without regard to age or health. As premiums went up, the young and healthy people dropped out, leaving an older and sicker population in the insurance market, which meant that the average cost of health care for each customer went up, which meant that premiums went up, which meant that people who weren't that old or sick dropped their insurance, leaving an even older and sicker population in the insurance market.