Young adults are not convinced that insurance coverage is a viable financial option
Young adults in the United States have faced a difficult decision during the latest open enrollment period. As open enrollment comes to an end, young and health consumers have had to decide whether or not to purchase health insurance coverage or face a federal fine and which of the two may end up being more expensive. Notably, the fine for those without insurance has gone up in 2016, which may have influenced many young people’s decision to acquire insurance coverage.
Federal penalty brings more financial stress to the uninsured
This year, the minimum penalty uninsured consumers will pay is $695 per uninsured adult in a household, or 2.5% of that household’s annual income, whichever may be higher. This fine was introduced with the Affordable Care Act, but the law does have provisions that allow people to be exempt from the penalty. Some uninsured consumers may actually end up paying more for their lack of insurance coverage, depending on the size of their households and their annual income.
Young adults seeking higher education are finding it difficult to afford insurance coverage
For some young consumers, the cost of health insurance makes the federal penalty more attractive. Notably, those pursuing higher education typically have very limited and strict budgets, meaning that they cannot justify purchasing coverage that they will not actually use. While the federal government does offer subsidies to make health insurance coverage more affordable, young consumers still consider coverage to be too expensive, with some being forced to decide between paying premiums and purchasing the food that they need.
Threat of federal penalty forces more people into the health insurance market
A recent poll from the Kaiser Family Foundation found that many young consumers have attempted to acquire health insurance coverage, but could not do so because of its expensive nature. Despite this, the threat of the federal penalty has driven more healthy consumers to acquire coverage, which the Centers for Medicare and Medicaid Services suggests keeps premiums manageable. The federal government has been working to inform the uninsured that they will face higher penalties, but the growing cost of health insurance coverage is also an issue that needs to be addressed.