July 6, 2013

Health care overhaul: 'Young invincibles' worry insurers

If too many young adults stay out of the new insurance marketplace, the equilibrium of the Affordable Care Act could be upset.

By KELLI KENNEDY The Associated Press

(Continued from page 1)

Francois Louis
click image to enlarge

Francois Louis, 20, of Davie, Fla., can’t remember the last time he went to a doctor and says he gets by on over-the-counter medication when he’s sick. “I probably would do the $100 fine” instead of buying insurance coverage under the Affordable Care Act, he said.

The Associated Press

Emily Nicoll
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Emily Nicoll, 27, of Coppell, Texas, would receive a $2,100 tax credit under the Affordable Care Act and pay about $83 a month for her premium. While Nicoll stands to save money on health insurance under the new law, compared to what she pays now, many young people who make more money would not.

The Associated Press

She said younger people use about a fifth of the services that older beneficiaries do.

HIGHER PENALTY SUGGESTED

Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology who helped craft that state's law, said he thinks the first-year federal penalty should be higher.

The penalty under the Massachusetts law, which served as the model for Obama's overhaul, was $218 the first year in 2007. Gruber said that amount proved effective.

"People hate paying money and getting nothing for it," he said.

Roughly 40,000 of about 6 million Massachusetts residents paid the penalty the first year, he said.

Many young adults have chosen relatively bare-bones health plans before the Affordable Care Act, but the new law requires all plans to offer a minimum set of benefits, thus raising the price for coverage.

The cost of health coverage is difficult to estimate because it includes so many factors, but a 27-year-old making $30,000 a year in 2014 will have a $3,400 premium and will be eligible for subsidies that cover about 26 percent of the bill. That person would end up paying $2,509, or about $209 a month. That does not include deductibles, co-pays and other variables which can vary widely.

The estimates come from the nonpartisan Kaiser Family Foundation's online Health Reform Subsidy Calculator.

Francois Louis, a 20-year-old college student in South Florida who works part-time, can't remember the last time he went to the doctor and gets by on over-the-counter medication whenever he's sick. He'd love to get a check-up, but says it's too expensive on his income of less than $15,000 a year.

"I probably would do the $100 fine because it's just cheaper and you don't have to worry about paying off monthly costs," said Louis, a student at Broward Community College near Fort Lauderdale.

Louis would get a $2,718 tax credit and have to pay $300 toward his premium, according to the calculator.

Health advocates note that many people who have difficulty affording health insurance now will qualify for federal subsidies.

The financial assistance will go to those making less than $48,000 a year who cannot get affordable coverage through their job.

SOME WOULD SAVE MONEY

That includes 27-year-old Emily Nicoll of Dallas, who makes $20,000 a year working in customer service for a sports team.

She said she pays a lot of money for basic health benefits, including $80 a month for two prescriptions and a $100 co-pay for each doctor's visit. But the memory of being in a car accident in high school lingers, so she will continue to pay for health insurance once the new law takes effect.

"That's the fear that makes me pay out that $151 a month," said Nicoll, who says most of her friends do not have insurance.

She would receive a $2,100 tax credit under the Affordable Care Act and pay about $83 a month for her premium.

While Nicoll stands to save money on health insurance under the new law, many young people who make more money would not.

The potential for skyrocketing prices caught the attention of a Democratic state lawmaker in New Jersey, Assemblywoman Celeste Riley. She is so worried about the cost for young people that she helped pass legislation to remove a requirement that students at two-year colleges have health insurance to attend class. But Gov. Chris Christie vetoed the bill last week.

Riley said the low-cost, limited plans currently offered to students cost about $600 a year, but prices could rise up to $2,000. The Affordable Care Act allows people to stay on their parents' plans until age 26, but many parents also lack insurance in the current economy.

"In this one small situation, I have students that really are going to be hit so hard financially," she said. "I think that really some of them will decide not to go to school."

 

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