The individual mandate penalty also increases each year; the $95 or 1% of income is just for 2014.
Even by 2016 it maxes out at $695 for many individuals (or $2,085 as a maximum). Even $695 wouldn't be enough of an incentive under my scenario earlier, and that was assuming a monthly premium of only $100, which is a VERY low premium.
Ok... some people will make that conclusion, but your original claim was that the mandate has "no teeth". That's obviously untrue unless you believe penalties that large will have absolutely no effect on consumer behavior, which is a conclusion any serious healthcare economist would disagree with. Sure not everyone will end up buying insurance, but that was never the intention of the individual mandate. It was to drive enough people in to the state/federal exchanges to keep them profitable. You can claim that the penalties aren't stiff enough to do so, but most people who deal with this stuff for a living would disagree (including the insurance companies), and the only way to really know for sure is to wait a year or two.
Also, if you really have friends who are opting out of health insurance because of the ban on denying insurance for a preexisting condition, they're woefully misinformed. There's a set enrollment period for that very reason. If you don't have health insurance come May 2014 and you get badly injured or develop some sort of awful disease, you can't just enroll in one of the exchanges.
