Young adults would receive more government help to pay for Obamacare plans under a House bill introduced Wednesday.
The Advancing Youth Enrollment Act, by Rep. A. Donald McEachin, D-Va., would aim to bring more people between the ages of 18 to 34 into the Obamacare marketplaces by increasing the amount of tax credits they receive to pay for health insurance premiums.
Under the proposal, the maximum percentage of income that young adults would have to pay toward health insurance under Obamacare would decrease by 2.5 percentage points for people between the ages of 18 to 30. Each year after, until the age of 34, they would see a gradual phaseout of 0.5 percentage points a year.
The percentage of income that people must pay for health insurance is cut off at roughly 9.86 percent, meaning that they won’t be penalized for choosing to go uninsured if the only policies available to them exceed that amount. But the penalty, known as the “individual mandate,” is going away next year, and Democratic lawmakers say that one way to make up for the removal of Obamacare’s tool to drive younger Americans to enroll is to have the federal government funnel more money into the system so more people can afford coverage.
Estimates from McEachin’s office show that under the bill premiums to young people would decrease by an average of $645 a year and that coverage would become more affordable and accessible for 5.7 million people. The bill has not been scored by the Congressional Budget Office, which provides estimates of health insurance coverage and how much legislation would cost the federal government.
People who buy Obamacare plans typically are self-employed or work for a company that doesn’t provide medical coverage. Health insurance through Obamacare can be costly for people making above $48,000 a year, the income threshold at which they no longer qualify for subsidies. Lawmakers who support more government funding toward young people say that the costs are untenable for them.
“Our young Americans struggle with the constant challenge of trying to make ends meet with limited resources,” McEachin said. “Far too often, they are burdened with student debt, burgeoning housing costs, and stagnant wages.”
Obamacare has cut the uninsured rate among young people by more than half, both by allowing them to buy Obamacare plans and through having them stay on their parents’ plans until age 26. Still, their participation in the exchanges isn’t as high as insurers would like to see. Estimates show that 8 million in this group are still uninsured.
Young, healthier people are a coveted part of the health insurance market because their participation helps balance out the cost of older, sicker enrollees, keeping premiums down for customers overall.
The legislation is the House companion to the Senate bill introduced by Sen. Tammy Baldwin, D-Wis., in March. It has at least 14 Democratic cosponsors in the House.
