President Obama’s 2010 health reform law has been heralded by its supporters as strongly beneficial for young Americans. After all, the ACA decrees that all health insurance plans that offer any dependent coverage must offer coverage to enrollees’ “adult children” (the terminology used in the law) until age 26, even if the adult child no longer lives with his or her parents, is not a dependent on a parent’s tax return, or is no longer a student … even if the adult child is married. And the uninsured rate for those between 19 and 26 has indeed decreased.
So what’s not to like about the health law for young Americans? The under-appreciated truth is that the ACA has serious adverse impacts on young Americans, far more significant and longer lasting than temporary eligibility to remain on a parent’s insurance.
Health insurance costs are now dramatically shifted onto the backs of younger, healthier adults. Proponents of the ACA claim that those shunning insurance are responsible for shifting massive costs to insured Americans, thereby raising insurance prices significantly without the ACA’s individual mandate. This is factually false. Generally, the population at whom the mandate is directed – those who voluntarily do not buy insurance and are not eligible for current government insurance – tend to be younger, healthier, and use far less medical care, on average about $850 and only $56 per year in emergency care. Based on both household survey and provider data, uninsured health care shifts only 0.8% to at most 1.7% of expenditures toward those already insured.
The truth is that the health law’s individual mandate was created for one major reason – to force millions of younger, healthier Americans to pay more for insurance than they receive in benefits to subsidize the rise in insurance premiums directly caused by the ACA itself. Because the federal government defines required coverage, and then prevents insurers from considering most risks in determining premiums, the ACA will necessarily cause health insurance premiums to rise. President Obama’s solution to this predictable disaster is to force young and healthy people to buy expensive health coverage costing several thousands of dollars to subsidize the bloated insurance prices for others that his law has created.
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