As part of the stimulus bill passed in February, the feds started subsidizing 65% of health-insurance premiums for certain workers eligible for Cobra insurance, the program that allows people to keep their health insurance for a while after they lose their jobs. Between March and November, 39% of people who were eligible for the subsidies signed up for Cobra, according to an estimate out today from the consulting shop Hewitt. During the months before the subsidy was created, 19% of people who were eligible for Cobra signed up for the program.
I predict that these numbers will mimic the future numbers of people who, when required by federal law to purchase health insurance, will do so.
Without subsidies, it’s about 19% at today’s costs. That number doubles with subsidies. But these numbers are relevant to today’s insurance prices. Health insurance premiums double every eight years– when the mandates go into effect in 2014, the average premium will cost roughly $14,000. So, I predict that only about 15% of people, when mandated, will actually purchase health insurance. Because the decision will be to pay a fine of $800 or throw your money away to a monopoly on a $14,000 insurance policy that doesn’t meet your needs.