Insurers are concerned that raising costs will stop twenty-somethings from purchasing coverage.
When the healthcare overhaul goes into full effect on January 1, 2014, most Americans will be required to purchase health insurance or face a tax penalty, but many young adults who are unemployed or under-employed in the current economy are balking when it comes to buying a plan.
Some young adults are already planning to choose the penalty over the coverage, raising concerns.
Even after the reforms go into full effect and a $100 penalty will need to be paid if the required health insurance coverage is not purchased, some young adults are deciding to opt for the penalty. This is either because they are earning just enough not to be able to qualify for government subsidies, or because they feel that they are young and healthy and won’t use the benefits of the coverage.
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This makes persuading young and healthy adults to buy health insurance an important focus under the new law.
Insurers that are currently scrambling to make sure that the plans that they will be selling will comply with the Affordable Care Act will now also need to direct their efforts toward appealing to young and healthy adults. They will no longer be permitted to deny Americans coverage due to a pre-existing condition, and there are limits to the amount that they are permitted to charge policyholders in older age groups. This means that encouraging young and healthy individuals to purchase a policy will be vital to their ability to more easily keep their premiums low.
Experts are cautioning against a “young invincible” group that could merely opt to pay the fine instead of having to pay several hundred or even thousands of dollars every year on premiums. If these individuals don’t realize the value of participating in the new health insurance exchanges, it could mean that many of the predictions regarding the balance of the marketplaces could be thrown off. Insurers had been counting on the premiums paid by these healthy young individuals to help to counterbalance the higher costs that will be associated with covering sicker and older policyholders.