‘Young Invincibles’: Their role in health care reform Author:    Posted under: Health InsuranceHealth Insurance questions answered


If you are between the ages of 19 and 29, a generally healthy individual and unconcerned about what could medically befall you in the future, thus, you go about your merry way without insurance, then you belong to this group of people called the “young invincibles”.

Let’s make a clarification: there are certainly those who want medical coverage but are unable to do so due to the costs of health insurance. Young adults are less likely to be offered coverage through their employers, and do not earn enough money to pay for medical insurance out of their own pockets.

Whatever their reasons are for willingly forgoing health insurance, it turns out that they are impacting the health-care system in a really big way. Since they are less likely to get ill and actually need health care than older generations, health insurance companies need them to spread out financial risk to keep the premiums of the elderly from skyrocketing. This fact will also will also ensure that these young invincibles will only be charged low premiums.

Young invincibles have a pretty big stake on the health care reform. Come 2014, the mandate is for everyone to have health insurance – this means young adults have no other option but to become insured unless they want to pay the penalties. The fine will be $95 for the uninsured individual, increasing each year until it tops out at 2016 at $695 or 2.5% of his or her annual income. The fines are capped per family at $2,250 in 2016.

Some may feel that paying out the annual penalty of $95 is still pretty cheap compared to the steep costs of health insurance premiums. There’s still the fear that young adults will forgo medical insurance and opt to pay the fines, in which case, the health care reform could be in big trouble.

Since the law is mandating health insurance companies to provide coverage for high risk customers, such as those with pre-existing conditions, they will need to offset the costs with customers who are young and healthy. For insurers to afford the cost of providing coverage for the old and sick, more healthy people need to sign up for coverage. If not, premiums will continue to rise for everyone.

And what about those young adults who belong in the low income bracket? The answer may lie in this: many of these young invincibles won’t have to pay for coverage as under the legislation, Medicaid coverage will be extended to those low income individuals. Additionally, they may be able to obtain discounted health plans at health exchanges starting 2014.

In addition, employers will have to provide coverage for their employees’ dependents until age 26 assuming that said young adults cannot obtain health care coverage from their own employers.

A study done in 2008 by the Urban Institute showed that only 48% of young adults strongly agree that health insurance coverage is a necessity compared with 70% of adults over the age of 27.* Even with all these measures in place, there is still the challenge of convincing the massive number of young adults to sign up for health insurance. Indeed, many feel that the mandate places an extra burden on young adults – to subsidize health care for those who are older and sicker.

Source:
* http://www.urban.org/UploadedPDF/411691_young_adult_insurance.pdf

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