Myth 1: Premium Prices Are Too Expensive For Young People

Forbes Contributor Chris Conover: Millennials Will Pay Premium Prices That Are Unfair And Overly Expensive. According to Chris Conover, a Forbes contributor, young people will pay far more for premiums than they would for coverage without the ACA in order to subsidize older Americans:

Let's be clear: by design, this law can work if and only if enough young people are willing to pay premiums far higher than are actuarially fair in order to subsidize workers my age who on average earn far more than the young workers who are subsidizing them. Even if one takes into account that Millennials in the long run eventually will become old themselves and benefit from these subsidies, Obamacare still is an extraordinarily bad deal that effectively would force today's 18-year olds to pay 18 percent more for their medical care over a lifetime than if each generation paid its own way. Such an age-related tax is unconscionable. Imagine if sales taxes or income taxes included a surcharge for everyone who happened to be a twenty-something. If this idea sounds preposterous, welcome to Obamacare. [Forbes, 11/21/13]

USA Today: “Insurance Costs Are Soaring For The Young.” According to a November 11 op-ed in USA Today, young Americans are being forced to pay disproportionately high premiums:

As a result, insurance costs are soaring for the young. In 45 states and Washington, D.C., young adults will find that their premiums have risen since Obamacare's implementation, according to an October study by the conservative Heritage Foundation. And in most states, we're not talking about the kind of slight increases that could be offset by forgoing a couple of lattes a month. Instead, these increases are enough to make young adults squeeze in another roommate -- or maybe even move back in with Mom and Dad. [USA Today,11/11/13]

Watchdog.org: Premium “Increases Are Generally Sharper For Young People.” Watchdog.org claimed there were indications that young people would not sign up for the ACA on the exchanges due to rising costs:

But there already is some pretty good evidence that young people wouldn't be flocking to the exchanges even if they were in good working order. And that's a big deal, because the arithmetic behind Obamacare requires that lots of young, relatively healthy people buy insurance and effectively subsidize the cost of the older, less healthy, more expensive people in the system.

As Cathy Reisenwitz wrote last week, this is why the whole scheme shouldn't be called insurance at all - because it's really cost-pooling.

[...]

And why are lots of young people not showing up for Obamacare? Refer back to the first point. While all adults will see higher premiums in most states, the increases are generally sharper for young people. [Watchdog.org, 10/22/13]

REALITY: Most Young Uninsured Americans Will Qualify For Subsidies, Making Coverage Affordable

The Washington Post: “90 Percent Of Uninsured Young Adults Will Qualify For [ACA's] More Generous Subsidies.” According to Washington Post's Wonkblog, 90 percent of uninsured young adults will qualify for tax credits to subsidize their health coverage:

To start, about 90 percent of uninsured young adults will qualify for the law's more generous subsidies. Census data shows there are about 11 million Americans between 20 and 29. Eight-seven percent of them have incomes below 400 percent of the federal poverty line, meaning they will qualify for some level of a tax subsidy or for the Medicaid program.

The bar on the far left represents the 4.83 million young adults who earn less than 138 percent of the federal poverty line and will become eligible for Medicaid. That entitlement program does not use the age rating provisions used in the private market, meaning that one-third of young adults won't interact with this part of Obamacare in any way.

The three bars in the middle show young adults who will become eligible for subsidies under the Affordable Care Act. Those subsidies will cap the young adults spending on health insurance as a percent of income. Let's take an individual who earns $22,240, which works out to 200 percent of the poverty line. That person would get enough tax subsidies so that, at most, he was spending $1,407 annually on health insurance (a $117 monthly premium). [The Washington Post, 2/11/13]

Robert Woods Jones Foundation: 5.4 Million Young People Will Be Eligible for Medicaid In 2014. According to the Robert Woods Jones Foundation, 5.4 million young Americans will have access to no cost health coverage under Medicaid:

There has been tremendous policy focus on getting so-called “young invincibles” to purchase coverage in the news health insurance exchanges being built under the Affordable Care Act (ACA). While enrolling these uninsured young adults in exchange plans is important, even more uninsured young adults - 5.4 million in totoal--will be eligible for Medicaid in 2014. Although the young adults who will be eligible for Medicaid under the ACA are a heterogeneous group, efforts targets at the parents of Medicaid-covered children at households receiving Supplemental Nutrition Assistance Program (SNAP) or Unemployment Insurance (UI) could reach as many as half of these uninsured young adults. An estimated 4.3 million uninsured young adults with incomes below 138 percent of the Federal Poverty Level (FPL) will not be eligible for Medicaid in January of 2014, because they live in states that are not planning on expanding medicaid. Most will likely remain uninsured, given their lack of access to affordable coverage. [Robert Wood Johnson Foundation, November 2013]

Myth 2: The ACA Provides Excessive Coverage For Young Americans

Las Vegas Review-Journal: “ACA-Compliant Plans Are Loaded With Many Services Most People Will Never Use” Like Maternity Coverage For Single Young Men. A November 8 editorial claimed that many of the essential benefits required of insurance plans under the ACA are excessive and will not be used by those covered such as maternity coverage for single, male young adults:

But lest anyone think Obamacare is doing just fine here in Nevada, plenty of evidence to the contrary has come out in the past week, much of it in two reports from the Review-Journal's Jennifer Robison. On Sunday, Ms. Robison noted that new, ACA-compliant plans are loaded with many services most people will never use -- such as maternity care for a healthy, single, 20-something male. Such add-ons pump up the cost of premiums and also serve to encourage young, healthy people to pay the penalty tax for not having ACA-compliant insurance, rather than buy coverage larded with costs for benefits they'll never need. [Las Vegas Review-Journal, 11/8/13]

REALITY: Essential Benefits Like Maternity Coverage On All Plans Spreads Financial Burdens More Evenly And Promotes Healthy Mothers And Babies

Los Angeles Times: “Society Has A Vested Interest In Healthy Babies And Mothers.” According to the LA Times, unhealthy babies and mothers raise costs on the rest of society and waste public resources unnecessarily, which would affect men:

Society has a vested interest in healthy babies and mothers. And that's all society, because unhealthy babies and mothers impose a cost on everybody -- in the expense of caring for them as wards of the public, and in the waste of social resources that comes from children unable to reach their full potential as members of society because of injuries or illnesses caused by poor prenatal and postnatal health.

Child mortality rates are among the most important indicators of a nation's overall health profile, and the U.S. rate stinks compared with the rest of the industrialized world's -- at 7 deaths of children under age 5 per 1,000 live births, it's worse than Israel's, South Korea's, Japan's and every Western European nation's. That's why maternity and newborn care and pediatric services are among the 10 health benefits that Obamacare requires to be part of every health plan.

Some of these benefits are so important, they're required to be among the free benefits of catastrophic health plans that may be sold to individuals under the age of 30. They include anemia screening for pregnant women and folic acid supplements for women of childbearing age. [Los Angeles Times, 11/1/13, emphasis original]

Los Angeles Times: Universal Maternity Coverage Balances Costs Between Men And Women. According to the LA Times, “the principal reason” women's premiums cost more than men's is due to the cost of maternity care, but with the ACA, premiums are more balanced because of the requirement that every health plan provide maternity care:

Up to now -- before Obamacare's rules kick in Jan. 1 -- only 12% of policies in the individual insurance market offered maternity coverage. Those that offered the coverage often did so as separate riders imposing huge deductibles for maternity care alone -- $5,000 for maternity services, according to a 2010 survey by the House Committee on Energy and Commerce, and limits on benefits of only a few thousand dollars. The cost of maternity and newborn care is the principal reason that, pre-Obamacare, women were systematically charged more for health insurance than men.

Because insurers pitched maternity coverage in the individual market only to buyers of childbearing age, the premiums were high and they still made almost no money on them. One company internal memo reviewed by the committee stated that its loss on maternity riders came to 90% of income, a money-losing ratio," the memo said.

But that's what happens when you sell an insurance benefit to a narrowly defined market. Without the cross-subsidies inherent in a large pool of insured people, no single coverage is affordable to those who specifically need it. [Los Angeles Times, 11/1/13]

Washington Post: Until The ACA Was Passed, Pregnancy Was Considered A Pre-Existing Condition. According to The Washington Post, some women who suddenly became pregnant and found that their insurance didn't cover pregnancy were stuck without insurance because other insurance companies considered pregnancy a pre-existing condition:

Up until now, many policies on the private market did not cover maternity care as a standard benefit. Women who unexpectedly became pregnant would find, to their surprise, they weren't covered for those services. In some cases, when they tried to switch, their insurance company would treat their pregnancy as a preexisting condition and not cover the cost. [The Washington Post, 10/31/13]

Washington Post: Insurance Plans Also Cover Male-Only Services. According to The Washington Post, insurance plans are also required to cover some male-only services such as “one designed to check older men who have smoked for abdominal aortic aneurysms.” [The Washington Post, 10/31/13]

Businessweek: Before the ACA Established Minimum Coverage Standards, 78 Percent of Medical Debt-Related Bankruptcies Were For Individuals That Had Health Insurance. According to Businessweek, “Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.” [Businessweek, 06/04/09]

Myth 3: Young Americans Will Avoid Signing Up

Wall Street Journal: Early Enrollment Numbers Show Few Young Enrollees Are Interested In Enrolling In The ACA. A November 4 article in The Wall Street Journal claimed that there is little evidence of young healthy people signing up for coverage, a situation that could jeopardize the stability of the ACA:

Insurers say the early buyers of health coverage on the nation's troubled new websites are older than expected so far, raising early concerns about the economics of the insurance marketplaces.

If the trend continues, an older, more expensive set of customers could drive up prices for everyone, the insurers say, by forcing them to spread their costs around. “We need a broad range of people to make this work, and we're not seeing that right now,” said Heather Thiltgen of Medical Mutual of Ohio, the state's largest insurer by individual customers. “We're seeing the population skewing older.” [The Wall Street Journal,11/4/13]

LVRJ: Obamacare Will Fail Due To A Lack Of Young Healthy Enrollees. The Las Vegas Review-Journal wrote that young Americans are not willing to sign up for coverage under the ACA, which will lead to failure of the law:

And that leads to a big problem: For Obamacare to survive, more than anything, it needs millions of young, healthy people to sign up for insurance. Their premiums are supposed to offset the costs of older, less healthy people. Instead, as insurance broker Phil Randazzo told Ms. Robison, he is “really only seeing unhealthy people calling. We're not getting calls from the 31-year-old guy who just wants to buy health insurance.” [Las Vegas Review-Journal, 11/8/13]

REALITY: Young Adult Plans Are Cheap And Their Enrollment Is Expected To Accelerate

HHS: “Half Of Single Young Adults Eligible For The Health Insurance Marketplace Could Get Coverage For $50 Or Less.” According to a press release by the Department of Health & Human Services, 46 percent of single young adults could access coverage through the exchanges for $50 or less:

A new report released today by the Department of Health and Human Services (HHS) shows that nearly half (46 percent) of single young adults who are uninsured and may be eligible for coverage in the Health Insurance Marketplace could get coverage for $50 or less per month.

[...]

Today's report examines data from the 34 Federally-facilitated and State Partnership Marketplaces and finds that out of 2.9 million single young adults ages 18 to 34 who may be eligible for coverage in the Marketplace, 1.3 million (46 percent) could purchase a bronze plan for $50 per month or less after tax credits. In the 34 states, a total of 1.9 million young adults, representing nearly 7 in 10 (66 percent) of the potentially Marketplace-eligible uninsured ages 18 to 34, may be able to pay $100 or less for coverage in 2014. [Health and Human Services, 10/28/13]

Kaiser Health: Uninsured People Value And Want Health Care Coverage But, Prior To The ACA, Saw Cost As The Greatest Obstacle To Getting Covered. Kaiser Health reported:

“It's not just the people who have insurance that value it: A majority of those who currently lack coverage also want it. Two-thirds of the uninsured say it is ”very important" to them personally to have health insurance (with another 21 percent saying it is “somewhat important”), and three-quarters (76 percent) describe health insurance as “something I need.” Overall, only one in ten of the uninsured say coverage is not important to them, and just under a quarter believe they are healthy enough that they “don't really need health insurance.” Compared with their insured counterparts, the uninsured are somewhat less convinced that health insurance is worth the money it costs, though a slim majority (56 percent) of those without insurance believe it is worth the money."

[Kaiser Health, 6/19/13]

The Atlantic: Massachusetts' Health Care Reform Enrollment Started Slow, Accelerated Over Time. According to The Atlantic, Massachusetts' health care reform law, which the ACA is modeled after, had very slow initial enrollment, but saw enrollment levels spike as the penalty deadline approached:

“To my friends in the media, I have one message: please take a chill pill. You won't see 7 million enrollees for a while, and that's not failure, that's real world,” John McDonough, a professor at the Harvard School of Public Health who was deeply involved in the passage and implementation of Massachusetts' 2006 health reform law, wrote of the new Obamacare program in mid-October. In Massachusetts, getting people signed up “was a slow crawl, not a sprint.”

Data from the first full year of enrollment in the Commonwealth Care plans in Massachusetts shows that the number of people who purchased premium plans was minuscule at first, with a rate of increase of only 123 people in February 2007. That surged to 3,645 in April and then remained fairly steady all year, before spiking to 7,783 in the month before the penalty deadline for remaining uninsured kicked in.

  [The Atlantic, 10/24/13]

Enroll America's Filipic: Young People Are Likely To Put Off Signing Up Until The Last Minute. According to a blog post by the Young Invincibles -- a national organization representing young people -- young Americans are likely to delay enrollment in health care plans until close to the penalty deadline:

But backers of Obamacare -- and some experts on online consumer behavior -- say it's too soon to panic. Lots could change between now and March 31. Young people are likely to treat enrollment like a term paper -- they'll do it, but at the last minute. After all, according to one online insurance broker, that's what a fair number of their grandparents shopping online for Medicare plans do: wait until they're smack up against the deadline.

And e-brokers point out that shopping for insurance isn't like buying a book on Amazon or a plane ticket on Kayak. Sam Gibbs, president of eHealth Government Systems, said people take their time to understand insurance options and may visit a site repeatedly. It can be a “several weeks or up to a month process,” he said. “This is not a one and done type process.”

When Massachusetts did its own health reform, people typically had 18 interactions -- website visits, phone calls or email -- before they signed up. The big surge came in the last two months before the state's individual mandate kicked in. [Politico, 11/7/13]

CNN Money: In Massachusetts, Only 6 Percent Of Young People Remain Uninsured. According to CNN Money, despite a slow start to enrollment in Massachusetts Commonwealth Care plans, only 6 percent of young people are uninsured, down from 18 percent pre-reform:

The mandate, along with subsidies that make policies more affordable, has brought the Massachusetts uninsured rate down to 3%, the lowest in the country.

Now that firms with 11 or more workers are on the hook for insurance, small-business employees are less likely to go without. More low-income workers are covered. And the hard-to-persuade healthy 18-to-34 crowd has been brought into the fold: Only 6% of these “young invincibles” lack insurance today, according to the state's Center for Health Information and Analysis (CHIA), down from 18% pre-reform. [CNN Money, 6/4/13]

Myth 4: Young People Are Better Off “Opting Out” Of Coverage

Sun Sentinel: “Opting Out Of Obamacare A Smart Move For Millennials.” According to a September 30 op-ed in Florida's Sun Sentinel, young Americans are better to “opt out” of insurance and pay the fine:

Thankfully, millennials can avoid this fiasco by opting out of Obamacare. This path allows them to pay a small penalty, which then frees them to purchase health insurance outside of the exchanges. That insurance can be specifically tailored to their individual needs, and it won't have the drawbacks that make the exchange system so unappealing.

Young people can actually end up saving a substantial amount of money by taking this road. A recent study by the National Center for Public Policy Research estimates that 3.7 million young Americans will save at least $500. Roughly 3 million will save as much as $1,000.

So, opting out is an attractive option for millennials who tend to be healthy and need a greater share of each paycheck. [Sun Sentinel, 9/30/13]

REALITY: Young People Are Better Off Paying For Coverage Than Remaining Uninsured

MSNBC: Choosing To Pay The Penalty Instead Of Purchasing Insurance Makes Little Financial Sense. An August 9 MSNBC piece on the benefits of younger, healthy Americans purchasing insurance explained that most young Americans will qualify for subsidies to make their insurance more affordable, and that passing on a health care plan could leave them subject to “financial ruin” if they need serious medical care:

Obamacare also uses tax credits to discount most young people's coverage. Anyone with an income between 100% and 400% of the federal poverty level ($11,490 to $45,960 in 2013)--which is to say the vast majority of healthy young adults--will benefit accordingly. In Los Angeles, a 25-year-old man earning $17,235 will pay $34 per month for silver-level coverage next year. That's 80% less than the same coverage would cost without the discount ($174 per month).

Suppose that young man heeds the FreedomWorks call to action. By passing on the health insurance and paying a penalty of $27 per month (the fixed rate for anyone making less than $32,500), he'll save himself a grand total of $7 per month--the price of a turkey sandwich.

He may really want the sandwich, but he should understand that it's not a free lunch. He's actually choosing between two purchases. He can pay $27 a month for... nothing. Or he can pay $34 for a health plan that provides ready access to primary care and could spare him financial ruin if he suffers a serious illness or injury. “It usually costs a little more to buy the plan than pay the penalty,” says Jay Angoff, the Washington-based attorney who oversaw the initial rollout of Obamacare for the Department of Health and Human Services. “But if you look at what you're getting in return, there's no contest. For most people, paying an extra few bucks a month to get health insurance is the rational choice.” [MSNBC, 8/9/13, emphasis added]

San Francisco Chronicle: 'Most People Need Some Kind Of Health Care At Some Point In Their Lives' According to the San Francisco Chronicle, opting to pay the fine and not insure will leave young people without coverage when they need it:

Anthony Wright, executive director of Health Access in Sacramento, a consumer group that supports the health law, said it's a myth that young people don't want insurance.

“Young people, when offered coverage on the job, take it up at similar rates as older folks,” he said. “The reason young folks are the most uninsured group is they tend to be lower income and be in jobs that don't offer health insurance.”

And while paying a fine instead of buying health insurance may meet the letter of the law, it doesn't provide anything for the price.

“Paying a fine may be cheaper than heath insurance, but then you still don't have health insurance,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. “Most people need some kind of health care at some point in their lives.” [San Francisco Chronicle, 9/28/13]