Insurance Fraud

President Barack Obama and his Health and Human Services Secretary, Kathleen Sebelius, are bragging about their army of community organizersnavigators that they’re prepping to go out and entice Americans, especially young Americans, to sign up for Obamacare.

The reasons for needing young Americans to sign up include these two, in particular: Obamacare fails in an enormously expensive fashion (even more so than its spectacularly expensive present failure, even before it’s fully implemented) unless young—healthy—Americans sign up so their premiums (artificially inflated compared to the cost of truly risk-based health premiums) can be used to subsidize old(er) Americans’ (which includes me) premiums (artificially suppressed compared to the cost of truly risk-based health premiums).  The second reason is that Americans, including young Americans, aren’t economically, or fiscally stupid—that’s just a projection of the Progressives’ on shortcomings onto others—and so they’ll need to be…persuaded…to sign up.

It’s useful, then, to understand what these community organizersnavigators (dang—I keep getting these terms confused) will do and what their backgrounds will contain.  What they’ll do is contained in the “navigate” root term.  In order to guide their charges to an “appropriate” policy and to assess eligibility for their own premium subsidy (too low income, for instance, which in a free market world would be another argument for a young, healthy American not to spend any money on health insurance), these guys will need to collect extensive financial and personally identifying information from each young American.

What are the acceptable backgrounds for these “navigators?”  Apparently, any background is acceptable; HHS will do no background checks at all.  Any felon will do.  Any person lacking the education of a high school graduate will do.  These wonders won’t even need to be bonded or carry Errors and Omissions coverage.  There isn’t the first particle of a pretense of consumer protection in their navigator function.

Can you say, “identity theft?”  Can you say, “incompetence?”  Can you say, “Government sponsored insurance fraud?”

Aside from that, there’s a simple exercise that all Americans should do, but especially young Americans just starting out in the world; it’s easily done on a spreadsheet.

The penaltytax for not buying health insurance acceptable to the government (e.g., an Obamacare policy) is $695 for a single person (as many (most?) young Americans will be, at least for a significant portion of the period covering this exercise).  A typical health insurance premium (not the cheapest or most expensive) for a healthy, single 25-year-old man runs to $1,600 per year.

Here’s the exercise: take the difference between that tax and that premium and grow it at, say 3% per year, which is roughly what could be had in a mutual fund that invests in a stock market index.  “Invest” those $905 every year in that hypothetical mutual fund at those 3%, and see the value will accumulate by the time our young American has reached early middle age.  I get a skosh (that’s the technical term) over $25,000 for our young man.  That’s money he could use for his own purposes, rather than government’s, purposes that might include being socked away, year on year, into his retirement plan, being committed toward his rent or mortgage, being spent in real time on food and clothing, even being spent on health insurance—of his choosing, and especially in a free market, from a constellation of policies that might be available.

Certainly, the actual value represented by those example $25k will vary widely, depending on individual circumstance and actual market performance, but the idea is clear.

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