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The Voice of the Black Community


Obamacare a bad deal for young adults
Health insurance overhaul comes with a price
Published Tuesday, November 5, 2013 8:04 am
by Penny Nance and Sheri Miller

We had to pass it to see what's in it. Well, now that we've read it, the people of North Carolina should be shocked, even appalled by the unnegotiable sticker price.  Especially the young people.

A Manhattan Institute analysis of the HHS numbers shows North Carolina faring the worst under Obamacare with individual-market rates tripling for women and quadrupling for men.  The same analysis shows Obamacare increasing underlying insurance rates for young men by an average of 97 to 99 percent and for young women by an average of 55 to 62 percent.  Young Tar Heels should be apoplectic.

You see, Obamacare depends on the individual mandate, which forces younger, relatively healthy consumers, deemed "young invincibles," to enroll for health care to subsidize the costs of older, sicker, and more expensive insurance enrollees.

Insurance companies generally offer lower premiums to younger Americans, since they generally have lower health costs.  But starting in 2014, the law implements an age band, making the amount paid by an older individual no more than three times what a younger individual pays.  Therefore, if a state currently allows an age band of 5:1, older Americans might see premiums decrease — but younger Americans would see premiums spike.

The law also imposes price controls on health insurance under a community rating that would similarly limit insurer's ability to offer lower premiums to low-risk enrollees. Community rating forces you to pay health insurance premiums on the average characteristics of the community, not on the basis of your own health characteristics (e.g., smoking status, drinking behavior, weight, sex, and age).  Talk about unfair.

To a generation that values social justice, young Americans should wake up and smell the hypocrisy.  Obamacare fails to help them in the short or long run and is flat out unfair, encouraging low-risk individuals to remain uninsured rather than overpay for health insurance.  Obamacare redistributes the limited income of healthier young people to the wealthier and unhealthier older generation.

If they do choose to enroll to avoid the penalty for remaining uninsured, how will they even afford these astronomical rates, as they face a 16.2 percent unemployment rate?  That's more than twice the unemployment rate of all ages.  Lest we forget, an additional 1.8 million young adults are not factored into the unemployed rate, because they have simply given up finding a job.

These are America's future leaders about which we are talking. 

This administration has already wreaked havoc on our economy and left young people in the dust. Millennials hold 17 percent of all part-time jobs, despite being just under 10 percent of the population, and the trend is not improving.  For those seeking a full-time job, good luck. Millennials, especially males, still haven't recovered their pre-recession, full-time employment rate.  Even for those with higher education, the employment drop-off has gotten worse.  College graduates between the ages of 20 and 24 have a 10.8 percent unemployment rate, compared to a rate of 7.3 percent for the general population.  The unemployment rate for Millennials with a master's degree jumps up to a stunning 17.2 percent.

Now, the Obama Administration leaves young people with only two options: 1) Buy a one-size-fits-all health care plan on the exchange with more coverage than they need for more than they can afford, or 2) Pay the penalty for not buying a government-approved-and-mandated health insurance plan.

A recent study by the National Center for Public Policy Research shows that about 3.7 million of those aged 18 to 34 will be at least $500 better off if they forgo insurance and pay the tax for not enrolling. More than three million will be $1,000 wealthier.     

The administration has spent hundreds of millions of dollars to trot out sports stars and Hollywood celebrities to try and convince young people to swallow the hard pill that they are cash cows for older folks.  They continue in a mad scramble to stay the course on implementation, even though their own team is asking for more time and their haste has inflated the risks of privacy violations on a wide scale.  They hope young people don't notice; I hope they do.

Penny Nance is president and CEO of Concerned Women for America Legislative Action Committee. Sheri Miller is state director for Concerned Women for America of North Carolina Legislative Action Committee.



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