During his State of the Union address, President Barack Obama contended that “already the Affordable Care Act is helping to slow the growth of health care costs.” Yet the costs of health insurance continue to climb, a direct consequence of the Affordable Care Act, and many uninsured Americans are likely to remain that way.
Health insurers are pushing double-digit premium increases, some as high as 26 percent. Next year, when the Affordable Care Act’s requirement to have insurance takes effect, premiums are expected to rise further, and many young Americans will have to choose between buying health insurance or paying a penalty. Although proponents of the law argue that subsidies will entice younger people to buy insurance, it actually is expected to have the inverse effect. Subsidies are too small, and out-of-pocket costs for insurance are much higher.
For many young Americans, it makes more sense – although it has negative impacts on the overall health care system – to wait until they are very sick to purchase insurance, since they can’t be denied coverage due to a pre-existing condition – or to seek to qualify for so-called “free” insurance, such as Medicaid (called Medi-Cal in California).
And the penalty alternative is so much less expensive than the cost of health insurance that the majority of people purchasing insurance figure to be older and less healthy. Younger Americans won’t want – or won’t be able to afford – to spend so much on health care. It will be young, healthy Americans, therefore, who will tend to become the losers.