An AP article claims the Affordable Care Act will lower the cost of insurance for young adults through a host of government interventions such as new mandates, Medicaid expansion, or subsidized insurance. But none of these options actually make insurance affordable, they only shift costs. Under the ACA, health insurance for young adults will remain expensive, convincing many to go without insurance until they get sick.
But what the piece fails to point out is the unintended consquences—the ACA actually encourages young and healthy adults to forgo coverage.
The guaranteed issue mandate of ACA forces insurance companies to provide insurance to anyone, and the community rating mandate requires companies to charge the same rates to all. This will lower costs for some, but increase premiums for younger healthy adults. It also removes the negative consequences of going without coverage. The uninsured will have to pay the individual mandate penalty/tax, but starting out at $95 a year, that’s a lot less than buying insurance.
In other words, you can wait until you get sick to buy insurance, and you can’t be denied coverage or be charged a higher price. What a deal!
Allowing people to wait and buy insurance until they get sick forces higher premiums on everyone, because only the unhealthy will bother to purchase insurance. Of course, that defeats the purpose of “insurance” and undermines our entire health care system. For this reason, it’s considered fraud to get auto insurance to cover your car after you wreck it.
But hey, the policy was well-intentioned. Isn’t that what counts?
The fact is, government interventions will only make coverage more costly and quality health care harder to obtain. Young adults need patient-centered reforms that establish competition and bring down the cost of insurance for all ages.