The Slacker Mandate Crumbles

One of the so-called “popular” provisions in Obamacare is the “slacker” mandate, which allows adult “children” to stay on their parent’s health insurance plans until the age of 26. While many describe this provision as popular, it is far from good policy. The reason is that allowing working-age Americans to stay on their parents’ plan increases insurance premiums and gives them the option of turning down their own employer-sponsored insurance.

Both scenarios are already playing out.

The Obama Administration expected that the slacker provision would “only” raise health insurance premiums by 1%. However, experts believe that increase will be higher. And Americans have already seen their premiums increase while their benefits have been reduced.

New analysis from The Heritage Foundation of an Employee Benefit Research Institute (EBRI) study shows that young Americans are forgoing their own insurance plans in order to stay on as dependents to their parent’s coverage:

“In the EBRI study, 20 percent of individuals had plans in their own names before Obamacare. After the regulation’s implementation, this share dropped to 17.5 percent. The share of individuals with dependent coverage changed from 24.7 percent to 27.7 percent in the same period of time, likely due to the effect of the law. As noted in the EBRI study, these are early effects, and more time will be necessary to understand the real impact that this provision has on the distributions of who is paying for health insurance. Nonetheless, the EBRI study is a good first step in understanding the real effects of this portion of [Obamacare].”

Due to Obamacare, taxpayers will be footing the bill for a whole host of other provisions that make the legislation toxic. But because of provisions like the slacker mandate, some politicians hedge against fully repealing the law. Recently however, private health insurance companies have picked up on the apparent popularity of this provision and say they will continue to uphold it even if the law is overturned. Senate Minority Leader Mitch McConnell (R-KY) discussed why that is:

“For example, the private health-insurance market has already responded on the growing demand to leave 26-year-olds on policies, because it’s turning out to be a good business decision for them.”

He went on to say that he’s “not convinced that issue needs to be addressed at the federal level.”  This means that we don’t need the 2,000+ page Obamacare legislation in order to get twenty-six year-olds coverage on their parent’s plan. The Heritage Foundation has put forth a better solution:

“Young adults should be encouraged to obtain coverage on their own when they are young and healthy. Federal tax law currently confines tax relief for the purchase of health insurance almost exclusively to those who have coverage through the workplace. Many younger adults, for example, are unemployed, work for an employer that does not offer coverage, are still in school, or find little incentive to buy coverage. Congress should replace the outdated employer-based model with individual tax credits for any person, including a young adult, who buys health care coverage. Having an individual tax credit available would create a direct financial incentive for individuals to obtain and keep their own health insurance, regardless of their job or job status. While insurance coverage for young people, including catastrophic coverage, is usually inexpensive, a tax credit would have the added benefit of making it even less expensive.”

Lawmakers are beginning to understand that we cannot preserve flawed Obamacare policies, even if the media continues to characterize them as “popular.” The answer is clear: Obamacare must be fully repealed.

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