President Barack Obama’s ‘affordable’ healthcare law is shaping up to be anything but for young Americans, according to a new study, with premiums for healthy Millennials increasing by as much as 260 percent.
The American Action Forum released a new survey this week detailing the rate shock many young Americans will encounter as they enroll in Obamacare’s health insurance exchanges. Using data from various government agencies including the Center for Medicare and Medicaid Services and the Government Accountability Office, American Action Forum found that premiums for a healthy 30-year-old male, non-smoker, will increase in all 50 states and the District of Columbia.
“Due to the ACA’s sweeping market reforms, rates for low-premium plans have increased exponentially between 2013 and 2014,” the study states. “In fact, on average, a healthy 30 year old male nonsmoker will see his lowest cost insurance option increase 260 percent.”
The Affordable Care Act offers three types of plans: bronze, being the cheapest with the most basic coverage, silver and gold. But American Action Forum studied rate shock under the bronze plan, which they suspect many young people will be drawn to based on its low-cost price tag.
In order for the cost of premiums to remain low for all who are covered under Obamacare, more than 2.7 million 18- to 35-year-olds must register for the exchanges. The White House set up what was supposed to serve as a negative incentive for Americans to register for the exchanges: don’t sign up for insurance, then pay a fine. But many young people are discovering the fine associated with failing to enter into the marketplaces is much cheaper than the cost of premiums.
“In response to rising costs, young healthy enrollees opt out of coverage, seeing the investment as financially disadvantageous given their low medical costs,” American Action Forum states. “The insurance risk pool becomes disproportionately older and sicker, further increasing prices and driving insurers out until the system becomes unsustainable.”
The lack of participation from young people can cause rates across the board to increase, a phenomenon the organization calls “premium spiral.”
“Premium spiral may be eminent, as many will find it financially advantageous to forego coverage, potentially limiting the actual number of ‘young invincibles’ entering the exchange system to well below the administration’s goal of 2.7 million,” the study states.
For a healthy 30-year-old specifically, premiums increase nationwide, though the change varies by state. In Massachusetts, for example, young consumers will see the cost of health insurance rise by only 9 percent — the lowest increase. But in Vermont, young people can expect to see premiums cost a whopping 600 percent more under Obamacare compared to rates in 2013.
And despite the Obama administration’s consistent touting of low-cost health insurance, young people, as demonstrated, appear to be the victims of what is shaping up to be an unaffordable law.
Check out American Action Forum’s interactive map detailing how much premiums raise by state below.
