Will ObamaCare get the young enrollees it needs to succeed?
BY MONIFA THOMAS Staff Reporter August 31, 2013 10:14AM
Michael Ross, 20, does not have health insurance because he says he doesn't have a job and can't afford it. But he's hopeful he will be able to afford it, thanks to some new options the affordable care act should have beginning in October. | Monifa Thomas/Sun-Times
Updated: October 2, 2013 6:15AM
Will one of the key elements of the Affordable Care Act work the way it’s supposed to? That could depend on whether young people who don’t have health insurance decide to get it.
The online marketplaces created by the Affordable Care Act are supposed to offer a one-stop shop with many different options for affordable health insurance starting Oct. 1. Nationally, the White House has said that it wants 7 million people to enroll in the online marketplaces by the end of March. Of those, officials say about 2.7 million of the new enrollees must be cheap-to-insure young and healthy people; otherwise, there will be too many older, sicker people making costs and premiums rise.
About 19 million young adults ages 18 to 34 lack health insurance, making them the least likely age group to have insurance, the U.S. Department of Health and Human Services said. In Illinois, more than 713,000 people of that age are uninsured, according to the U.S. Census Bureau.
While young adults might spend an average of $854 a year on health care if they’re healthy, the flip side is that if a young person unexpectedly needs to go to the hospital, it won’t be cheap. The average cost for a three-day hospital stay is $30,000, and the cost of fixing a broken leg can cost up to $7,500, the Department of Health and Human Services says.
Experts agree that the number one reason young people don’t have health insurance isn’t because they think they don’t need it. The cost dissuades many. That’s the case with 20-year-old Michael Ross, a student at Harry S. Truman College in Uptown who says, “I don’t have a job or nothing, so health insurance is not something I’m really looking at to get.”
But Ross, who says he owes hospitals $2,000 from emergency room visits over the last five years, said he would buy it if he could.
Illinois still hasn’t said what we can expect with the insurance plans that will be offered on the online marketplace, known as the Illinois Health Insurance Marketplace.
Still, Young Invincibles, an advocacy group that says it represents the interests of young people in the fight for health reform, argues that young people who couldn’t previously afford insurance will soon have new options, because many who have low-paying jobs would qualify for tax breaks under the Affordable Care Act.
“We anticipate there will be a lot of uninsured young people who can access some of these cost breaks that are rolling out this fall,” said Jennifer Mishory, deputy director of Young Invincibles.
Individuals and families with income between 133 percent and 400 percent of the federal poverty level are supposed to receive subsidies on a sliding scale if they get insurance through the marketplace. That works out to up to $45,960 for an individual and up to $94,200 for a family of four.
The Kaiser Family Foundation has estimated that, among people currently buying insurance on their own, the average subsidy will be $2,672. For poorer, often younger people, that check will be much larger. So very few young people will pay the “sticker price,” as long as they don’t smoke, according to Karen Pollitz, senior fellow of the Kaiser Family Foundation, a nonprofit, independent research organization.
But the lead author of a study done by National Center for Public Policy Research, an independent conservative think tank, isn’t convinced that will be enough to get young people to flock to the online marketplaces and buy insurance.
The study found that about 6 million young people — who are single and childless — will likely be eligible for the online marketplaces. Yet, for 3.7 million of these people, their out-of-pocket premium costs for a Bronze plan — the cheapest option — could be at least $500 a year (this includes those who qualify for a subsidy). These people would be better off if they forgo insurance and pay the penalty.
That’s because even those young people who would qualify for tax breaks to purchase insurance would still have to pay $50 or $100 a month out of pocket, argued David Hogberg .
Hogberg, senior fellow at the National Center, acknowledged that he didn’t factor into the study the chance a young person could be injured — one of the critiques that has been made of the study.
But Hogberg said that doesn’t change the fact that if young people can purchase health insurance when they’re sick — once insurance companies aren’t allowed to turn people down or charge more for pre-existing conditions, beginning Jan. 1 per the Affordable Care Act — there’s no financial incentive to purchase it any earlier.
“Why are they going to pay $500 to $1,000 for exchange insurance when it’s cheaper to go without and they face much less risk if they don’t purchase it?” Hogberg said.
Pollitz, meanwhile, said it’s too soon to predict whether the White House will meet its target for young people.
“At the end of the day, this is kind of anyone’s guess,” she said, noting that the Congressional Budget Office is waiting until 2016 to see how the marketplaces work. “We just need to know that it will evolve.”