The “Thanks Obamacare” site byand the (CCHI) states:
Thanks to Obamacare, young adults are now allowed to stay on their parents’ health insurance plans until they turn 26 years old.
This provision “allows” nothing, but it forbids voluntary exchange. Prior to Obamacare, 25 year-olds would be “allowed” to stay on their parents insurance plans — provided that the insurer chose to offer customers a plan with this feature. For some customers, this feature could make their product more attractive than competitors’ products, especially if it does not increase the premiums too much.
If this mandate is so good, then why not increase the age to 27, or 30? Or extend it to the employee’s siblings? O’care supporters probably would like this, as many Obamacare commands are a means to creating socialized medicine in a nominally “private” insurance market.
Obamacare becomes illegal for people to buy insurance without this feature. It does not “allow” people to buy a less expensive plan that does not have it. We are forced to pay extra for it, whether we want it or not. The federal government estimates that the mandate would increase premiums by 1%, while Cigna estimates between 1 and 1.5%. Employees with dependents of any age may pay more than this if their employer is one of the many that plan to increase prices of dependent coverage.
What is the most just penalty for an employer and insurer who voluntarily engage in the buying and selling of a health plan that is illegal because it lacks coverage for dependents younger than 26 years old? A fine? And if they don’t pay?
Another angle: This mandate is all about special interest politics. One group appears to win, but they really do not. In his book, The Machinery of Freedom, economist David Friedman discusses how special interest politics works:
Special interest politics is a simple game. A hundred people sit in a circle, each with his pocket full of pennies. A politician walks around the outside of the circle, taking a penny from each person. No one minds; who cares about a penny? When he has gotten all the way around the circle, the politician throws fifty cents down in front of one person, who is overjoyed at the unexpected windfall. The process is repeated, ending with a different person. After a hundred rounds everyone is a hundred cents poorer, fifty cents richer, and happy.
If you support this mandate, then you cannot legitimately oppose any regulation, subsidy, tariff, etc. that violates free trade by benefiting one group at your expense.