{"id":362,"date":"2013-04-09T14:18:24","date_gmt":"2013-04-09T18:18:24","guid":{"rendered":"http:\/\/www.dougsbriefcase.com\/blog\/?p=362"},"modified":"2013-04-09T15:56:40","modified_gmt":"2013-04-09T19:56:40","slug":"young-people-love-president-obama-but-will-they-love-obamacare-040913","status":"publish","type":"post","link":"https:\/\/www.dougsbriefcase.com\/blog\/young-people-love-president-obama-but-will-they-love-obamacare-040913\/","title":{"rendered":"Young people love President Obama. But will they love Obamacare?"},"content":{"rendered":"
\"Photo<\/a>

Pho\u00adto Cred\u00adit Thinkprogress.org<\/p><\/div>\n

Young peo\u00adple love Pres\u00adi\u00addent Oba\u00adma. But will they love Obamacare?<\/p>\n

The real test will come this Octo\u00adber, when mil\u00adlions of unin\u00adsured peo\u00adple will be required to enroll in health insur\u00adance through health exchanges run by their state or the fed\u00ader\u00adal gov\u00adern\u00adment. The new exchanges will be a god\u00adsend for unin\u00adsured peo\u00adple with seri\u00adous health prob\u00adlems. Insur\u00aders will have to issue them poli\u00adcies and cov\u00ader their pre-exist\u00ading med\u00adical con\u00addi\u00adtions and will be pro\u00adhib\u00adit\u00aded from charg\u00ading them high\u00ader pre\u00admi\u00adums based on their med\u00adical con\u00addi\u00adtion or fam\u00adi\u00adly histories.<\/p>\n

But what\u2019s good for peo\u00adple who gen\u00aduine\u00adly need med\u00adical cov\u00ader\u00adage is bad for the exchanges. That\u2019s because the pre\u00admi\u00adums unhealthy peo\u00adple will pay won\u2019t near\u00adly cov\u00ader the cost of the care they\u2019ll con\u00adsume. To suc\u00adceed, the exchanges need to attract healthy peo\u00adple, who will pay pre\u00admi\u00adums but only rarely see a doctor.<\/p>\n

Those peo\u00adple tend to be young. And there are mil\u00adlions of them \u2013 an esti\u00admat\u00aded 18.5 mil\u00adlion unin\u00adsured peo\u00adple are between the ages of 18 and 34, accord\u00ading to the most recent gov\u00adern\u00adment data<\/a>. Near\u00adly 2 unin\u00adsured peo\u00adple out of 5 is in this age brack\u00adet. They are almost twice as like\u00adly to be unin\u00adsured as the gen\u00ader\u00adal pop\u00adu\u00adla\u00adtion. Most impor\u00adtant\u00adly for the exchanges, this group, as a whole, is excep\u00adtion\u00adal\u00adly healthy. Get\u00adting them to enroll in health insur\u00adance and pay pre\u00admi\u00adums for cov\u00ader\u00adage they\u2019ll rarely use is the best way to make the new exchanges work efficiently.<\/p>\n

So why does the health law make it so hard to enroll 18\u201334 year-olds in the exchange?<\/p>\n

The first is polit\u00adi\u00adcal. Although the Pres\u00adi\u00addent signed the health law more than three years ago, none of its major pro\u00advi\u00adsions has been imple\u00adment\u00aded. There have been pos\u00adi\u00adtive changes. Insur\u00aders no longer can impose annu\u00adal or life\u00adtime lim\u00adits on cov\u00ader\u00adage or drop people\u2019s insur\u00adance on obscure tech\u00adni\u00adcal\u00adi\u00adties. Few have noticed these changes because few have ben\u00ade\u00adfit\u00aded from them. The law\u2019s high risk pools, designed to allow peo\u00adple with seri\u00adous med\u00adical con\u00addi\u00adtions to obtain afford\u00adable cov\u00ader\u00adage pri\u00ador to the cre\u00adation of exchanges in 2014, have been an epic fail, insur\u00ading only a frac\u00adtion of eli\u00adgi\u00adble peo\u00adple at exor\u00adbi\u00adtant costs. Alas\u00adka, for exam\u00adple, spent $13 mil\u00adlion insur\u00ading just 45 peo\u00adple<\/a>. (Yes, you read that right.)<\/p>\n

The one high-pro\u00adfile suc\u00adcess was the require\u00adment that employ\u00aders and insur\u00adance plans allow young peo\u00adple to stay on their par\u00adents\u2019 poli\u00adcies until they turn 26. So eager was the Admin\u00adis\u00adtra\u00adtion to pro\u00advide some\u00adthing tan\u00adgi\u00adble to this large swath of young peo\u00adple that the require\u00adment<\/a> extends, not only to kids who no longer live with their par\u00adents, but also to those who are married.<\/p>\n

But the polit\u00adi\u00adcal advan\u00adtage that derives from this pro\u00advi\u00adsion will soon become a prac\u00adti\u00adcal lia\u00adbil\u00adi\u00adty for the exchanges. The Cen\u00adsus Bureau<\/a> esti\u00admat\u00aded that near\u00adly 8.3 mil\u00adlion peo\u00adple aged 18\u201325 lack health insur\u00adance. With the excep\u00adtion of undoc\u00adu\u00adment\u00aded aliens, they will be required to obtain health cov\u00ader\u00adage <\/a>or pay the new tax on the unin\u00adsured begin\u00adning in 2014. Instead of enrolling in cov\u00ader\u00adage through the exchange, they will be able to stay on their par\u00adents\u2019 poli\u00adcies. So a big cohort of young, healthy peo\u00adple won\u2019t buy cov\u00ader\u00adage through the exchange.<\/p>\n

There\u2019s a sec\u00adond group of healthy, young peo\u00adple who will be stay\u00ading out of exchanges: those who qual\u00adi\u00adfy for Med\u00adic\u00adaid. Begin\u00adning next year, the fed\u00ader\u00adal gov\u00adern\u00adment will pay 100 per\u00adcent of the costs of enrolling peo\u00adple with incomes below 138 per\u00adcent of the fed\u00ader\u00adal pover\u00adty lev\u00adel ($15,856<\/a>) in Med\u00adic\u00adaid. States with some of the largest Med\u00adic\u00adaid pop\u00adu\u00adla\u00adtions in the coun\u00adtry, like New York and Cal\u00adi\u00adfor\u00adnia, have jumped at this offer, although oth\u00aders have refused<\/a>.<\/p>\n

Since this group tends to con\u00adsume few med\u00adical ser\u00advices, why did the authors of the health law not choose to sub\u00adsi\u00addize their cov\u00ader\u00adage through exchanges, where they would help off\u00adset the costs of old\u00ader and sick\u00ader enrollees? The rea\u00adson is pret\u00adty sim\u00adple: it\u2019s a lot cheap\u00ader to enroll peo\u00adple in Med\u00adic\u00adaid than in pri\u00advate insur\u00adance. That\u2019s large\u00adly because Med\u00adic\u00adaid pays doc\u00adtors and hos\u00adpi\u00adtals so lit\u00adtle to pro\u00advide care \u2013 so lit\u00adtle, in fact, that many doc\u00adtors refuse to see Med\u00adic\u00adaid patients. An esti\u00admat\u00aded 42 per\u00adcent<\/a> of inter\u00adnal med\u00adi\u00adcine prac\u00adti\u00adtion\u00aders, for exam\u00adple, fall into this group. Peo\u00adple on Med\u00adic\u00adaid, not sur\u00adpris\u00ading\u00adly, have trou\u00adble find\u00ading doc\u00adtors and den\u00adtists to pro\u00advide their rou\u00adtine care. Adding 7 mil\u00adlion<\/a> more peo\u00adple to the pro\u00adgram next year will only make this worse. Cov\u00ader\u00ading those peo\u00adple in pri\u00advate plans with robust physi\u00adcian net\u00adworks would cost the gov\u00adern\u00adment far more than herd\u00ading them into an HMO<\/span> run by a low-bid gov\u00adern\u00adment con\u00adtrac\u00adtor. So to keep the costs of the new health care law con\u00adtained, the deci\u00adsion was made to put mil\u00adlions of young and healthy peo\u00adple into Med\u00adic\u00adaid. The prob\u00adlem is that this keeps those same young and healthy peo\u00adple out of the exchange.<\/p>\n

Those young peo\u00adple who do seek to avoid the new tax penal\u00adty for remain\u00ading unin\u00adsured by sign\u00ading up for insur\u00adance cov\u00ader\u00adage through the exchange will get a rather unpleas\u00adant sur\u00adprise: the pre\u00admi\u00adums will be unfair\u00adly high. Those rates will be high for every\u00adone, about 32 per\u00adcent high\u00ader<\/a>,<\/span> on aver\u00adage, than pre\u00admi\u00adums that cur\u00adrent\u00adly are charged in the indi\u00advid\u00adual mar\u00adket, accord\u00ading to a recent study by the Soci\u00adety of Actu\u00adar\u00adies. But they will be espe\u00adcial\u00adly unfair to young enrollees because they will be high rel\u00ada\u00adtive to the risks that they will con\u00adsume med\u00adical care.<\/p>\n

Insur\u00adance is about pric\u00ading risk. That\u2019s why your auto insur\u00ader tracks your dri\u00adving record, your issuer of home\u00adown\u00aders insur\u00adance wants to know what your house is worth and when it was built, and why your life or dis\u00adabil\u00adi\u00adty insur\u00ader usu\u00adal\u00adly wants to take blood tests before issu\u00ading you a pol\u00adi\u00adcy. An insur\u00ader who is accept\u00ading the risk of your hav\u00ading an acci\u00addent, your house burn\u00ading down or your dying dur\u00ading the term of your pol\u00adi\u00adcy wants to be able to accu\u00adrate\u00adly esti\u00admate these risks and set pre\u00admi\u00adums accordingly.<\/p>\n

Under the new health law, health insur\u00aders will be for\u00adbid\u00adden to col\u00adlect data to cal\u00adcu\u00adlate your risk. They will, how\u00adev\u00ader, be able to charge high\u00ader pre\u00admi\u00adums to peo\u00adple who admit that they smoke and they will be able to vary pre\u00admi\u00adums by age. Up to a point. Age is a rough proxy for health sta\u00adtus. There are 22-year-olds with chron\u00adic med\u00adical con\u00addi\u00adtions and 64-year-old triath\u00adletes. But as a whole, actu\u00adar\u00adies esti\u00admate that the expect\u00aded med\u00adical claims of a 64-year-old male are more than 6 times as cost\u00adly <\/a>as those of a 22-year-old.<\/p>\n

So the health law allows the insur\u00ader to charge the 64-year-old more than 6 times as much as the younger per\u00adson, right? Wrong. It pro\u00adhibits insur\u00aders from charg\u00ading old\u00ader peo\u00adple more than 3 times as much as it charges younger peo\u00adple. To adhere to that 3:1 ratio, the insur\u00adance com\u00adpa\u00adny has to reduce the pre\u00admi\u00adums it charges old\u00ader peo\u00adple and increase the pre\u00admi\u00adums it charges younger peo\u00adple. Using that same Acad\u00ade\u00admy of Actu\u00adar\u00adies study, I cal\u00adcu\u00adlate that it will have to give our 64-year-old a dis\u00adcount of around 44 per\u00adcent from the actu\u00adar\u00adi\u00adal\u00adly fair pre\u00admi\u00adum, while mark\u00ading up the pre\u00admi\u00adum for our 22-year-old by 41 per\u00adcent. That hard\u00adly seems fair. Nor does it seem a great strat\u00ade\u00adgy for achiev\u00ading the government\u2019s goal of lur\u00ading young peo\u00adple into buy\u00ading insur\u00adance that they don\u2019t think they\u2019ll need.<\/p>\n

The law\u2019s advo\u00adcates note that the gov\u00adern\u00adment will sub\u00adsi\u00addize those pre\u00admi\u00adums for many indi\u00advid\u00adu\u00adals. A per\u00adson who earns $34,470, for exam\u00adple, will pay no more than $3,274 a year for health cov\u00ader\u00adage, or 9.5 per\u00adcent<\/a> of their income. But, of course, an old\u00ader work\u00ader at that income lev\u00adel would pay the same amount for cov\u00ader\u00adage, despite the fact that he will, on aver\u00adage, run up med\u00adical bills that will be more than 6 times as great as our 22-year-old. Besides, why the clunky approach that marks up pre\u00admi\u00adums for young peo\u00adple then gives those who earn less than $46,000 a sub\u00adsidy? Why not just charge fair rates in the first place and then sub\u00adsi\u00addize those whom the gov\u00adern\u00adment believes can\u2019t afford them?<\/p>\n

One rea\u00adson is ide\u00adol\u00ado\u00adgy. Many Democ\u00adrats who vot\u00aded for the law dis\u00addained its hybrid approach that shack\u00adles pri\u00advate health insur\u00aders but allows them to sur\u00advive, pre\u00adfer\u00adring a gov\u00adern\u00adment-run sin\u00adgle pay\u00ader sys\u00adtem financed by new tax\u00ades, rather than by pre\u00admi\u00adums. The new law grants gov\u00adern\u00adment enor\u00admous new con\u00adtrol over that mar\u00adket, but doesn\u2019t go far enough, in their view. Rep. Jan Schakowsky (D\u2011IL<\/span>)<\/a> spoke for many in her par\u00adty when she said that the she would vote for the law as part of a \u201cstrat\u00ade\u00adgy\u201d to move to a sin\u00adgle pay\u00ader system.<\/p>\n

Whether this strat\u00ade\u00adgy will suc\u00adceed \u2013 whether the law itself will suc\u00adceed \u2013 is anyone\u2019s guess. But it helps explain some of its anom\u00adalies, like why it over\u00adcharges young peo\u00adple for cov\u00ader\u00adage. Many, per\u00adhaps most, Democ\u00adrats are uncom\u00adfort\u00adable with the con\u00adcept of insur\u00adance, at least as it per\u00adtains to health care. They think it\u2019s wrong to charge high\u00ader pre\u00admi\u00adums to sick\u00ader peo\u00adple based on their high\u00ader risk. They believe that gov\u00adern\u00adment can allo\u00adcate med\u00adical goods and ser\u00advices more effi\u00adcient\u00adly and more fair\u00adly than can mar\u00adkets and aren\u2019t ter\u00adri\u00adbly fond of pri\u00advate health insur\u00aders. But they judged that an imme\u00addi\u00adate move to a sys\u00adtem run entire\u00adly by the gov\u00adern\u00adment was a bridge too far. So they con\u00adtrived a law that makes our com\u00adpli\u00adcat\u00aded and con\u00adfus\u00ading health sys\u00adtem a lit\u00adtle more com\u00adpli\u00adcat\u00aded and confusing.<\/p>\n

Amer\u00adi\u00adcans remain divid\u00aded over the health law because, although they don\u2019t like insur\u00aders, they also don\u2019t like giv\u00ading the gov\u00adern\u00adment so much con\u00adtrol over some\u00adthing that mat\u00adters so deeply to them. True believ\u00aders of both par\u00adties have already formed their judg\u00adments about the new law. Many Amer\u00adi\u00adcans will take a more prag\u00admat\u00adic approach. If they don\u2019t see big changes in their employ\u00ader-spon\u00adsored cov\u00ader\u00adage and if they hear sto\u00adries of less for\u00adtu\u00adnate peo\u00adple find\u00ading cov\u00ader\u00adage, they may warm to the law. If the health insur\u00adance exchanges mis\u00adfire and young peo\u00adple balk at enrolling, they may view it as a mistake.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Young peo\u00adple love Pres\u00adi\u00addent Oba\u00adma. But will they love Oba\u00admacare? The real test will come this Octo\u00adber, when mil\u00adlions of unin\u00adsured peo\u00adple will be required to enroll in health insur\u00adance through health exchanges run by their state or the fed\u00ader\u00adal gov\u00adern\u00adment. Con\u00adtin\u00adue read\u00ading \u2192<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":369,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","wp_typography_post_enhancements_disabled":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"nfd_image_url":"","nfd_onboarding_generated":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[18,17,16],"tags":[70,67,36,69,66,68,1184,47,64,65],"class_list":["post-362","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-entitlements","category-health-care","tag-census-bureau","tag-doctor","tag-health-care-law","tag-health-exchanges","tag-hmo","tag-internal-medicine-practitioners","tag-medicaid","tag-obama","tag-rep-jan-schakowsky","tag-society-of-actuaries"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t