Young people may not be interested in health insurance
Health insurance will become mandatory by federal law in the U.S. beginning on January 1, 2014, per the Affordable Care Act. Despite the law’s requirement, however, many young people throughout the country are expected to forgo purchasing health insurance coverage simply because they do not need it. Healthy consumers have little use for health insurance as they consider it to be an unnecessary expense. The problem, however, is that these young people may be losing access to federal subsidies if they choose not to purchase coverage.
Opting out of insurance coverage could cause many to lose access to federal subsidies
The federal government offers subsidies for policies that are purchased through state-based health insurance exchanges. These subsidies are designed to offset the financial impact of these policies and are even making coverage free in some parts of the U.S. The subsidies are available to those that fall between 200% and 400% of the federal poverty level, making them accessible to a wide range of young people throughout the country. Federal aid is only available to those that sign up for coverage during the open enrollment period of health insurance exchanges, however, which began on October 1 of this year and will conclude on March 31, 2014.
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Young consumers may bear full burned of insurance costs
If young consumers decide not to purchase coverage during the open enrollment period, they will not be able to take advantage of the subsidies being offered by the federal government. For some, this could mean that health insurance policies will cost as much as $300 per month depending on their particular health conditions. Those with severe medical issues and those caught in serious life events, such as the birth of a child or the loss of a job, can enroll for coverage at any time, but their access to subsidies will also be limited.
Young people likely to opt for federal fines
Those that do not have health insurance coverage by January 1, 2014, will face fines from the federal government. These fines will be 1% of the total annual income of those without insurance coverage, but will not exceed $99. Many young people are expected to opt for the fine since it is less of a financial burden than health insurance policies would be.