There’s been a lot of talk about “fixing” Obamacare lately. Here’s my two-step plan:
- Increase the subsidy levels.
- Increase the penalty for not buying insurance.
That would pretty much do it. I could add lots of other small-bore things that need some tweaking, but why bother? These two things would do most of the job—and Republicans will never agree to them. They won’t agree to any of the small-bore stuff either. So take your pick. You can support a detailed 11-point plan for Obamacare that will never get passed, or you can support my 11-word plan that will also never get passed.
But since we’re all lightweight wonks around here, we should take a guess at how much we need to change the subsidy and penalty levels to make everything work. Basically, Obamacare’s big problem is that not enough young people are ponying up for insurance. To fix this, we need to get to a point where it’s cheaper for young people to buy insurance than it is to pay the penalty. This can be done by either increasing subsidies or increasing the penalty. Here’s my swag at what it would take:
You could increase subsidies by 100 percent and leave the penalty alone, or you could increase the penalty 250 percent and leave the subsidies alone. Or you can pick any point in between.
In reality, you could probably get by with smaller numbers, since nearly everyone will sign up if the penalty is within shouting distance of the net premium cost. You don’t have to literally make the penalty as high as the premium cost. I also assumed silver coverage in this chart, and you can assume lower numbers if you’re happy with kids buying bronze coverage.1
Anyway, that’s it. This chart is my proposed Obamacare reform. It represents something of an upper bound, and I imagine that someone who has actual working knowledge of all this stuff could do a lot better. Call your congressman today and demand that this chart be made into law.
1I’m not, especially, which is why I went with silver.