Study: Obamacare spikes young people’s health insurance costs

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Michael Bastasch DCNF Managing Editor
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If they can get the Obamacare exchange website to work, young people may learn some bad news upon signing up.

A report from the conservative American Action Forum found that health insurance rates for 2.7 million people aged 18 to 35 — the so-called young invincibles crucial to the health-care law’s success — would rise dramatically.

The main purpose of the individual mandate was to have these younger, relatively healthy consumers subsidize the costs of older, sicker and more expensive insurance enrollees.

“Due to the ACA’s sweeping market reforms, rates for low-premium plans have increased exponentially between 2013 and 2014. In fact, on average, a healthy 30 year old male nonsmoker will see his lowest cost insurance option increase 260 percent,” reads AAF’s report.

A healthy 30-year-old would see his health insurance costs rise in all 50 states and the District of Columbia.

Pre-Obamacare premiums average about $62 per month, according to AAF, while post-Obamacare premiums average about $187 per month — a 202 percent difference. The average change between 2013 and 2014 low-cost premiums is 260 percent.

Premium increases vary by state. The biggest increase is in Vermont, where young people will face a $332, or 600 percent, increase in insurance costs. Young people in Massachusetts, on the other hand, will only see premiums go up by nearly $20, or 9 percent.

AAF notes that Massachusetts is an outlier because it has been under an Obamacare-like system since 2006 and has already experienced premium spikes to pay the highest premiums before the new federal health law.

Youngsters in other states won’t get hit as hard as Vermonters, but still will see huge premium increases. South Carolinians will see premiums spike by 227 percent and Californians will pay 247 percent more for low-cost health plans.

“Vermont, Georgia, Nebraska, Arkansas, and Wisconsin. Vermont, Wyoming, Mississippi, Alaska, and Indiana all experience the highest actual dollar amount changes between 2013 and 2014,” AAF reports.

These cost increases raise questions about whether even the individual mandate will be able to keep younger workers in the health insurance market.

“Although an inexact science, the numbers clearly illustrate a problem for the Affordable Care Act, the individual mandate, and the exchange system,” AAF concludes. “Premiums for those required to subsidize the system have risen too much and the mechanisms meant to defray those costs and encourage people to participate in the system are too weak. As such, a significant portion of the uninsured ‘young invincible’ population will purposefully choose to remain without coverage. Should this be the case, the American insurance market will experience widespread premium spiral.”

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