Why do so many young people still avoid Obamacare like the plague? The expectation was that the health insurance exchange would cash flow on the actuarial backs of millions of Millennials. But it hasn’t worked out that way for obvious reasons, according to Generation Opportunity Policy Director David Barnes.
We were promised that by this year’s open enrollment period, the Obamacare-marketplaces would be robust and stable. Instead, they are spiraling out of control as premiums rise by 25 percent and insurers and consumers decide they want no part in it.
The pressure’s on Washington with the media focusing on the new enrollment period now underway. The feds have launched a desperate sign-up drive aimed at Millennials on social media and campuses in an attempt to stabilize a system that’s seen skyrocketing premiums and decreasing numbers of insurers and options. But subsidies only go so far in preventing sticker shock.
Young singles in their twenties earning an annual salary of $30,000 or more will pay at least $2,484 a year in Obamacare premiums even after receiving tax credits from the federal government, according to the Kaiser Family Foundation’s health insurance marketplace calculator.
The calculator estimates the cost of health insurance premiums and subsidies for individuals purchasing Obamacare silver plans by considering various metrics including income, age and family size.
For a single, non-smoking adult aged 21 to 29 with no dependents, the U.S. average premium for those making an annual salary of $30,000 is $207 a month, or $2,485 annually, even after receiving subsidies from the federal government.
For individuals in this demographic who are between 21 and 26 years of age, the tax subsidies stop after one earns a salary of $36,000 or more, meaning the cost of premiums would increase to $282 a month, or $3,384 a year.
No wonder some 3 million young adults under 26 have stayed home, remaining dependent on their parents’ health insurance premiums rather than government subsidies. That’s twice as many as the number of their peers who’ve bitten the bullet and signed up for coverage on HealthCare.gov. Clearly younger Americans still aren’t buying the Administration’s sales pitch.
In its announcement confirming that Obamacare premiums would go up by double digits, the Obama administration said tax credits would help ease economic pain caused by the increases.
“Eighty-five percent of current Marketplace consumers receive tax credits that bring down the cost of coverage, and, nationwide, about the same percentage of Marketplace-eligible uninsured Americans also have incomes that could qualify them for tax credits,” the Department of Health and Human Services said. “Tax credits increase dollar-for-dollar with the cost of a consumer’s benchmark plan, so they protect the large majority of consumers from rate increases.”
Many simply make the calculation that it’s cheaper to pay the IRS penalty and take their chances.
Rep. Kevin Brady (R., Texas), who chairs the House Ways and Means Committee, said open enrollment gives Americans two choices—pay sky-high premiums or pay a penalty.
“Obamacare has made health insurance for young people even more expensive,” said Brady. “Instead of taking steps to make healthcare affordable, the administration is using taxpayer dollars to mask the real costs of rising premiums and forcing young Americans to buy insurance they don’t want or need.”
“Open enrollment is now essentially two dismal choices: people can either pay sky-high premiums for a plan they don’t want or need, or pay a penalty,” he said. “Instead of being forced into a failing system, the American people deserve real health care choices. House Republicans have a better way to provide young Americans with affordable, high quality health options.”