Health insurance costs are now dramatically shifted onto the backs of younger, healthier adults. Proponents of the ACA claim that those shunning insurance are responsible for shifting massive costs to insured Americans, thereby raising insurance prices significantly without the ACA’s individual mandate. This is factually false. Generally, the population at whom the mandate is directed – those who voluntarily do not buy insurance and are not eligible for current government insurance – tend to be younger, healthier, and use far less medical care, on average about $850 and only $56 per year in emergency care. Based on both household survey and provider data, uninsured health care shifts only 0.8% to at most 1.7% of expenditures toward those already insured.
The truth is that the health law’s individual mandate was created for one major reason – to force millions of younger, healthier Americans to pay more for insurance than they receive in benefits to subsidize the rise in insurance premiums directly caused by the ACA itself. Because the federal government defines required coverage, and then prevents insurers from considering most risks in determining premiums, the ACA will necessarily cause health insurance premiums to rise. President Obama’s solution to this predictable disaster is to force young and healthy people to buy expensive health coverage costing several thousands of dollars to subsidize the bloated insurance prices for others that his law has created.
Young adults will now have less access to lower cost health insurance coverage, limited more than ever by government-defined “essential” benefits, actuarial requirements, and other regulations. Consumer-directed health plans often entice healthier, younger people to enroll, because such insurance is a smart financial decision – purchase lower cost coverage, while having the opportunity to accrue tax-sheltered savings. These plans also allow a tax deduction for health savings account contributions, a deduction far more valuable than that which applies only if itemized medical expenses exceed 7.5% of adjusted gross income. Not surprisingly, these plans have been surging in popularity, quadrupling as a choice by employees over the past 5 years to 13.5 million, rising in the large and small group, as well as the individual markets. Moreover, an increasing number of employers are offering these plans, because they cost less, and also because enrollees use more preventive services and wellness programs, improving employee health.