Obamacare will raise insurance costs, not lower them, for a lot of young, childless adults. What will happen when they find out?
Of course, not all of those people are young; some of them are in their 40s and 50s. Those people would be quite happy to pay $150 or $235 a month for insurance. (Unfortunately they won't get to, since the plans are lightly age-rated; for a 40 year old San Franciscan, the Silver plan will cost at least $300. But that's still a pretty good deal for them.)
Childless adults are about 65% of the total population of uninsured adults, which means that they are probably a majority of the young adults as well, so some back of the envelope math with fairly conservative assumption indicates that at least one in four of the uninsured are young childless adults. Of course, some of them will be poor enough to qualify for big subsidies, or Medicaid. Still, we're talking about millions of people who are in for a bit of a shock.
To which you might fairly say you can't please everyone, after all. They'll be grateful later, when younger people are subsidizing their insurance.
To which I would offer two rejoinders. First is that these people may have supported Obamacare precisely because they didn't understand what it meant for them. That doesn't seem quite fair. It probably should have been made clearer to Obama's large youth fanbase that what Obamacare will probably mean for them is a fairly substantial bill, not a lot of government assistance.
But here's the bigger issue: these people aren't buying insurance now, even though, as Avik Roy has pointed out, there are catastrophic plans available that cost a lot less than $150.
Yes, I understand that some people get rejected because they have pre-existing conditions; for those people the price insurance is now infinite, and it is about to come down a lot. But the insurers are not merely advertising insurance policies because Marketing wanted something for the interns to do. They do actually sell insurance to people. Will notes that he has purchased catastrophic coverage for about $100 a month, even though he is . . . not 21. Ten years ago I bought a catastrophic policy for even less than that, despite an autoimmune disease and raging asthma. (I had to give it up when I moved to New York, where such policies are illegal).
Most young childless adults in most states could purchase catastrophic insurance right now for about the cost of a cell phone data plan. They have not done so. Maybe this is because they don't realize how cheaply they can acquire bare-bones coverage. Or maybe they have a hard time fitting even $100 a month into a tight budget. The monthly take-home for someone making $32,000 a year and living in a major city is probably something under $2,000. As I well recall, carving an extra $100 out of that is not easy.
Leave aside the hardship we may be imposing on them by requiring them to purchase insurance (or pay a penalty that will eventually sum to hundreds of dollars). What are they going to do when they find out that they have the option of paying a fairly large sum for very modest coverage, or a really difficult amount for the kind of insurance that they thought they were going to get for practically free? Keep in mind that California's exchange has actually been more aggressive about trying to keep rates down than most states will be.
Will implies that they probably won't buy. I am agnostic. The individual mandate is now the law of the land, and Americans are pretty law abiding. Also, people clearly like having health insurance; they opt for more generous coverage even when it's not cost effective, and unions will give up almost anything else to protect health benefits. This may be enough to get the healthy youngsters joining the exchange.
But then again, it may not. And if they don't, that's going to be a really big problem. Without the subsidies from "young invincibles" paying $150 a month for almost nothing, the older, sicker part of the insurance pool will have to pay more. The healthier ones may eventually decide that they simply can't afford it; better to pay the fine, tolerate the tiny risk of a huge ER bill, and count on the fact that you can always sign up for insurance if you get sick. Rinse and repeat until the only people in the market are incredibly expensive to cover. This is what has happened to the current individual market in the State of New York, where everyone is theoretically able to buy insurance in the individual market, except that no one could possibly afford it.
The best evidence against this possibility is simply that it didn't happen in Massachusetts. Still, I don't think we can entirely rule it out. Massachusetts started out with a relatively small population of uninsured, and a growing economy where employers are actually adding salaried positions with good benefits. That's not the situation in most states in 2013.
Which is why, as I say, you'll have to judge for yourself how much this matters; there's still too much up in the air. The one thing we can say for sure is that come October, we should probably prepare for some complaining.