The Affordable Care Act (more commonly known as Obamacare) was based in part on the premise that the more young and healthy Americans purchase insurance through the Obamacare exchanges, the more affordable health insurance would become for everyone. That’s because individuals ages 18 to 34 typically have fewer health care needs, are less expensive to insure, and can reduce the overall cost of health insurance for others. As Politico explained:
“Recruiting younger, healthier people is a make-or-break issue … [the Administration] is intent on recruiting healthier and therefore less-costly people in a bid to keep a lid on rising premiums and ensure the new insurance marketplaces thrive.”
Despite Obamacare’s mandate that everyone buy coverage and the Administration’s aggressive recruitment campaigns, the law isn’t working as its architects intended — and many young Americans are paying the price.
According to a 2014 analysis from NerdWallet, a price comparison tool for consumers, young adults who purchase insurance through the Obamacare exchanges are much worse off financially. As CNBC reported:
“A typical adult between 18 and 34 buying an [Obamacare] plan will pay $1,717 for health care this year—mostly in the form of premiums.
“But the average young adult without coverage will pay just $348, which includes the price of going to the doctor, as needed, as well as the penalty for not having insurance …
“The savings continue even when factoring in an emergency room visit. One trip to the ER, added to the other health costs, would result in a total annual cost of $2,022 for an average, uninsured young adult—compared with $2,791 for one who is insured.”
As the Heritage Foundation’s Senior Fellow, Robert Moffit, explained, Obamacare has forced young adults to purchase more coverage than they want, need, or can afford:
“[Obamacare’s] insurance rules standardize offerings and eliminate variation of coverage policies among the states, but the price is higher premium costs and an impediment … to opening up opportunities for individuals, particularly young persons who resist buying insurance, to secure more affordable coverage.”
House Republicans are proposing a better way.
Instead of forcing young adults to purchase excessive health insurance that’s unnecessary and expensive, we have a plan to:
Lower costs by repealing burdensome mandates. Obamacare’s three-to-one age-rating ratio — which adjusts premium costs according to age — led to artificially higher premiums for younger patients (whose pre-Obamacare rates were typically set at a fifth of the cost of older patients). Our plan restores the default age-rating ratio to five-to-one, while still allowing states the flexibility to narrow or expand, which will reduce the cost of premiums for younger patients who choose to purchase insurance. We know that punitive mandates won’t entice young people to buy insurance, but affordable, quality options will.
Expand access by providing flexibility and portability. Obamacare’s individual mandate forces young adults to purchase one-size-fits-all, Washington-approved health care plans —including coverage they may not want or need. Our plan ensures access to portable financial support so young adults can purchase the plan that works best for them. This support will grow as they get older and can be available for them throughout their lives — for instance, from job to job, home to start a business or raise a family, and into their retirement years.
Increase choices by encouraging innovation and competition. Over the last six years, opportunities for innovation and competition have been squandered by mandates and regulations. Rather than develop new plan designs at lower costs, insurance companies have had to reduce their offerings, narrow their networks, and raise costs — all in an effort to comply with Obamacare. Our plan unleashes the power of choice and competition — lowering costs and increasing quality so young adults can choose the right plan and providers.
Over the next few weeks, Ways and Means will continue its series of blogs showing how Americans of all walks of life will benefit under House Republicans’ health care plan.
CLICK HERE to read the full plan.