Thanks to a provision written into the 2010 healthcare reform, the Affordable Care Act, insurers paid the $147-million medical bill for the approximately 500,000 young adults aged 19 to 26 who were added to their parents’ insurance policies. This is a sign that one of the first implemented provisions of Obamacare has had its intended effect: shifting costs from hospitals, taxpayers, and families to health insurance companies.
Young people who are not able to take advantage of that provision experience a far different reality, and they might not be so keen on the Affordable Care Act. Here’s a look at why Americans aged 19 to 26 could hate Obamacare:
1) Nobody likes government pressure, especially young adults
Typically, the young adult demographic is the most likely to risk going without insurance. Because they are unlikely to suffer from the health conditions that send their parents to the doctor — like heart disease, diabetes, cancer, strokes, and arthritis — coverage often does not seem worth the expense. Regardless of Obamacare, that opinion is still a common one.
But, as this demographic is cheap to insure, the Obama administration needs to convince young people to sign up for insurance on the superstore-like exchanges this October in order to balance out older or sicker patients more likely to sign up for health insurance as soon as possible. Their insurance premiums cover the big bills for the relatively small number of sick people. According to estimates made by the Obama administration, approximately 7 million people will sign up for coverage via the exchanges in 2014 and between 2.6 million and 2.7 million of those enrollees need to be young, cheap-to-insure Americans for the system to work.
2) Expensive Premiums
When the constitutionality of the Affordable Care Act was under debate in the Supreme Court last year, Justice Samuel Alito highlighted a problem with Obamacare that could ultimately jeopardize the entire viability of the system of insurance exchanges. He pointed out that young, healthy adults currently spend an average of $854 a year on healthcare.
However, Obamacare would require them to purchase insurance policies expected to cost roughly $5,800. These added costs do not stem from additional “services that they are going to consume,” he continued. “The mandate is forcing these people to provide a huge subsidy to the insurance companies . . . to subsidize services that will be received by somebody else.”
Unfortunately, the main barrier to health coverage given by uninsured Americans in a June survey conducted by the Kaiser Family Foundation was cost. While the poll did not break down the numbers by age, 40 percent of respondents said costs was the main reason they did not have health insurance.
3) The Medicaid Gap
Many young people will likely be eligible for subsidies that lower their health insurance outlays. Like the American population as a whole, those young adults earning between 100 percent and 400 percent of the federal poverty level, which tops out at around $45,960 for an individual and $92,000 for a household of four, will be given federal tax credits.
Those earning up to 133 percent of the poverty level will be eligible for Medicaid if the state in question has chosen to expand the program. In its ruling on the Affordable Care Act, the Supreme Court ruled that the mandated Medicaid expansion was unconstitutional. Now that expansion is no longer required, the poorest young adults — whose incomes fall below the poverty line but above Medicaid eligibility, usually well below the poverty line — could be left without coverage, ineligible for both Medicaid and for tax credits to purchase private insurance.
4) How Affordable is Affordable?
With the economy and the labor market in the current state, many Americans in the 19 to 26 demographic, even those with college degrees, find themselves either underemployed, working at jobs that do not make use of their skills, or both.
Often, that means working in a restaurant or at another service-sector position. Despite Obamacare’s promise of affordability, many industry and policy experts are postulating that the healthcare reform championed by President Barack Obama will actually make health insurance unaffordable for many low-wage workers employed by restaurants, retail stores, hotels, and similar businesses that offer employer-sponsored health insurance.
The problem is simple to understand; what the government defines as affordable may just not be so easy to fit into budgets for many of the uninsured Americans the law was supposed to help.
For low-wage workers — many of whom live paycheck-to-paycheck and earn barely enough to cover basic necessities — 9.5 percent represents a lot of money. Take, for example, a restaurant worker who makes $21,000 per year. A premium that costs 9.5 percent of their income would run $1,995 for the whole year, or $166.25 per month, and the insurance would be considered by the federal government as affordable. In addition to the cost of premiums, workers could also face an annual deductible amounting to about $3,000 before insurance starts paying healthcare costs.
5) The numbers: A startling 42 percent of Americans are unaware that Obamacare is still on the books, according to an April Kaiser Family Foundation Survey. When asked about the status of the reform legislation, 12 percent of respondents said they believed that the law was repealed by Congress, 7 percent said it had been overturned by the Supreme Court, and 23 percent said they do not know enough about the law to give an opinion.
While this survey also did not analyze the data in terms of age, the large degree of confusion surrounding the legislation is noteworthy and likely a factor affecting the views Americans in all age brackets, especially those who are uninsured as many young people are.
But, regardless of how Obamacare could negatively affect their wallets and their healthcare, 77 percent of young people, 18 to 25, responded that “it was very important to them personally to have insurance” in Kaiser’s June survey. The poll’s findings indicate that many young adults worry about affording medical bills, especially catastrophic ones. However, the number of respondents who said they were healthy enough to not really need insurance was much higher among the 18 to 25 year-olds than among all ages.
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