If young Americans want to save $500 to $1,000 in 2014, there’s an easy way to do it: don’t buy health insurance as required under Obamacare’s Affordable Care Act.
Instead, people aged 18 to 34 can pay a $95 penalty and save the difference between that and what it would cost them to buy insurance through the state-based health insurance exchanges.
That’s the conclusion of a study by the National Center for Public Policy Research, which found that 6.7 million young adults will come out ahead by not buying health insurance.
Those numbers could be a huge problem for the ACA and the insurance exchanges because they need young people to buy insurance if the ACA is to work.
"This age group (18-34) that is young and relatively healthy must purchase health insurance on the exchanges in order to ‘cross-subsidize’ people who are older and sicker," the study said. "Without the young and healthy, the exchanges will enter a ‘death spiral’ where only the older and sicker participate and [the] price of insurance premiums will increase precipitously."
But the ACA’s rules and life in general provide young people incentives to put off buying insurance, the study said.
Guaranteed issue and community rating standards required by the ACA mean insurance companies have to issue policies to everyone and basically have to charge everyone the same premiums regardless "of factors such as health status and age," the study said.
That means young people can put off buying insurance until they get sick, and they will pay more in premiums than they would by buying individual policies under the medical underwriting standards insurers currently use.
Source: Business Journal
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