Tuesday, November 13, 2012

22-year Old Smoker Drops Health Coverage at Wal-Mart

"I really can't even afford it [the employee part of Wal-Mart's health coverage] now, so for it to go up even a dollar for me is a stretch," said Colby Harris, who said he makes $8.90 per hour and takes home less than $20,000 per year working in the Walmart store's produce department in Lancaster, Texas. 

Harris, a 22-year-old smoker, was set to see his cost per paycheck rise to $29.60 from $25.40. He says he has decided not to sign up for coverage. Given his low income, as Harris foregoes coverage any major medical bills could potentially fall to taxpayers through the government's Medicaid program. 

-from a CNBC report entitled "Wal-Mart Employee to Pay More for Health-Care Plans."

According to this link, the average cost of a pack of cigarettes in Texas was $6.00 in 2011.  Other internet links indicate that it could be as high as $7 per pack.  The amount of the increase in Mr. Harris' "cost per paycheck" is, according to the article, $4.20.  If he cuts back one pack per pay-period, he covers the insurance increase and has change left in his pocket.

As the story indicates, Harris will get medical services of some sort, if he needs them.  The government will pay for it, although, if he doesn't buy insurance, he will be "fined" or, as Justice Roberts would put it, "taxed" an amount for not having his own coverage.  I don't know just how the government will levy that fine - the IRS is assigned that task in Obamacare.  (I don't think government is all that good about taxing people with low incomes, however.)   I do know we will have more bureaucrats and more regulations to catch the Colby Harrises of the country, if we have the political will to collect that tax.  How that will really work out for Mr. Harris economically is too complicated for me to figure out on the fly.  If he keeps healthy, he will win for awhile.

Another point is obvious: his future health costs will likely be far higher than those of non-smokers, so the risk he assumes by dropping his insurance and smoking the cigarettes increases as he gets older, disproportionately in comparison to his non-smoking peers. Yet he is young right now and healthy.  As I said, he will win for awhile.  Our culture is all about the short term.

We subsidize bad choices, one way or the other.  Meanwhile, many people will fault Wal-Mart for increasing the employee cost of its health-care.

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