By Callie Shanafelt
California Health Report
Most young people feel like they have years of good health in the bank. They are, as a group, so unlikely to buy insurance that insurance companies dubbed them the young invincibles and in some cases gave up on trying to enroll them in health care plans.
Some young adults, inevitably, will be proven wrong in their optimistic evaluations of their health.
“We’re not invincible—no one’s invincible,” said California organizer Tamika Butler. It’s not that people of her generation don’t want insurance, Butler said, it’s that they can’t afford it.
Butler works for the Young Invincibles, an organization created in 2009 by two millennials who wanted to reclaim the term and advocate for health coverage for their generation.
Many advocates and experts wonder if the Affordable Care Act will actually make care more affordable for young people – or if the young will simply end up paying the price of lowering costs for everyone else. The “age-rating” provision of the ACA prevents insurers from charging an older client more than three times the amount they charge a younger client. In most states, the rate stands at 5 to 1. To make up for charging older people less, insurers are expected to start charging younger people more once the provision goes into effect in 2014.
Right now, young people are generally benefiting from protective changes ushered in by Obama care.
Possibly the most popular provision of Obamacare was the expansion of dependent coverage so that young people can stay on their parents insurance until age 26. Even those who want to repeal the legislation want to keep that provision intact. As one of the first provisions enacted, it’s also one of the first indicators to be evaluated.
The data suggests the change was a success in increasing the number of Americans with insurance. “The total enrollment exceeded original expectations,” said Harvard assistant professor and senior advisor to the Department of Health and Human Services Benjamin Sommers.
More than 3 million young people gained insurance between September 2010 and December 2011 because of the change, Sommers found. In his analysis, youth of all socioeconomic and racial backgrounds benefited from the provision.
“It’s hard to see whether it narrowed disparities,” Sommers said. “But we’ve really seen broad benefits in coverage.”
Those who it helped the most were single, male and out of school.
“The biggest gains tended to be in kinds of people who had fewer options,” Sommers said.
In the past, married young adults have had more health-care possibilities through a spouse, so the legislation helped to provide single young adults with another option through their parents. Women were also more likely to be insured, so Sommers said that the provision helped men catch up. Before the change, many insurers allowed young people to stay on their parent’s insurance while in college, so the provision also provided a new option for those no longer in school.
Sommers also found that young adults with poor health were most likely to get coverage in the first few months of the provision.
Because of the provision, 23-year-old Kurt Henlin was able to stay on his parents insurance after he graduated from Temple University last May. His mother has insurance through her job as an administrator at Bronx Community College.
Henlin majored in communications and wants to become a talent agent in Hollywood. He moved to Los Angeles in August to follow his dream. He is now temping at a talent agency.
“Most entertainment industry jobs do not offer insurance,” Henlin said.
He’s glad he has three more years to get on his feet before he has to worry about providing his own health plan.
“They agreed to pay until I’m a fully functioning adult,” Henlin said.
Next year, Henlin could also possibly qualify for a subsidy toward an individual plan through the state exchange, or for coverage through Medi-Cal once more of the Affordable Care Act provisions go into effect.
That’s when some experts worry the honeymoon between young people and Obamacare will end. In the past few months, insurers and opponents of the legislation have said that young adults should fear “rate shock,” because premiums will go up once the new provisions take effect.
While testifying before a House Energy and Commerce Committee subcommittee on March 15, Christopher Carlson, an analyst for a management consulting firm, said that premiums overall are not likely to increase, but he encouraged legislators to look closer at the Affordable Care Act’s effect on certain groups, including the young.
“Understanding these issues requires analyses that go beyond consideration of broadly stated averages, which can mask the effects on important subpopulations,” Carlson said.
“Our study indicates that the impact of the age rating compression will increase the average premium for policyholders between ages 21 and 29 by 29 percent,” Carlson said.
He went on to note that huge increases only affect to individuals who aren’t eligible for any premium subsidies through the exchange.
Carlson estimates that 1.4 million of the 11.2 million currently uninsured young people will not qualify for subsidies.
Other experts challenge the assertion that there will be huge rate hikes. An Urban Institute study, for instance, found that taking into account the premium subsidies and Medi-Cal expansion, rate increases will be minimal.
And many will qualify for help from the government. More than one million uninsured young people will qualify for Medi-Cal and 1.5 million will qualify for a subsidy, notes Jen Mishory, Deputy Director of the Young Invincibles. She also pointed out that the Affordable Care Act outlines a catastrophic plan for people under age 30, which satisfies the individual mandate if young people don’t want to pay the higher premiums.
Carlson recommends a few ways to slow projected increases. One possible solution would be to phase in the age band over a period of years. His other suggestion is to legislate the affordability of the catastrophic plan.
But Mishory said the benefits of finally having coverage are worth the price.
“We looked at it as generational compromise,” Mishory said.