YOUTH
PREMISE: The health law would help needy young Americans obtain insurance by allowing them to remain as “children” up to age 26 and eligible for coverage under their parents’ health plan.
HOW IT’S WORKING: This provision drives up premium costs for everyone and creates perverse incentives.
- This provision will increase health insurance premiums, including for people who didn't add adult children. (Kaiser document)
- According to the New York Times the average family premium was $15,073 in 2011. This is just one component of a total average premium increase of 9.5 percent (or $1,300) between 2010 and 2011. In 2012, family premiums rose again by an additional 4 percent to $15,745 (Kaiser), and in 2013, family premiums rose by another 4 percent to $16,351 (Kaiser). Annual family premiums reached $18,142 in 2016. (Kaiser)
- Some employers have dropped all types of dependent coverage to avoid these additional costs. (Wall Street Journal article)
HOW IT’S WORKING: As a whole, the health law hurts young adults by making employer-sponsored, college-sponsored, and individual market insurance options more expensive for them.
- The law makes it harder for young adults to get employer-provided insurance (or even a job) as employers face financial incentives to drop coverage, reduce hours or cut staff. (House Ways and Means Committee report)
- Colleges have responded to regulations in the law by shut downing their low-cost student insurance programs, or raising premiums significantly. (Wall Street Journal article and accompanying GAO study)
- The law increases insurance costs for young adults who must buy their own insurance. Estimates vary on the severity of these increases, but the American Action Forum found that premiums for the lowest cost plans would increase 260 percent for the average 30-year-old man and 193 percent for the average 30-year-old woman. One of the law’s provisions prohibits insurance companies from charging older, sicker patients more than three times what the youngest, healthiest age band pays. For example, if a 60-year-old customer has a premium of $900/month, the lowest premium the insurer can offer younger customers is $300/month. This disregards the fact that older customers may have claims and health costs that are more than three times of those incurred by young adults.
