Saturday, March 29, 2014

How Much Does Obamacare Rip Off Young Adults?

Obamacare is trying to "work" by ripping off young adults. Many are not falling for it.

Scott Gottlieb writes:
Obamacare is asking young adults to effectively subsidize the healthcare costs of older Americans. So far, Millennials are resisting this age-based transfer of wealth. Many are clearly opting instead to remain uninsured, or else they are buying cheaper health plans that don’t conform to Obamacare’s regulatory dictates.

My AEI colleague Kelly Funderburk and I looked at four states: Arizona, Illinois, Pennsylvania, and Texas. We then looked at a typical 30-year-old at one of six different annual income brackets: $20,000 in annual income, $25K, $30K, $35K, $40K, and $45K. For each of the four states, we computed how much an Aetna AET +0.94% Classic Silver plan would cost the same 30-year-old at each of these six income bands. We looked at monthly premiums, deductibles, and out of pocket limits. We chose the Aetna plan because it is generally considered a higher quality insurance, operated across all of these markets, and represented a median price point among the offerings.

Look at our numbers (laid out in the charts below) and you’ll see why so many Millennials have Obamacare sticker shock. Someone, for example, earning $25K annually in Arizona will pay $2,424 in total monthly premiums for Obamacare (10% of their annual income) and still be stuck with a $4,000 deductible and a $5,200 cap on their out of pocket costs. The same person in Illinois will pay $3,576 in annual premiums, and in low cost Texas $2,460.

What about the same 30 year old who now earns $30,000 annually – the average salary for a pre-school teacher according to census data? In Arizona, their annual cost for carrying the Obamacare plan runs $2,772 and their deductible is $5,000. In Illinois, the same person will spend $4,092 for the same health plan, and also have a $5,000 deductible before their full health coverage kicks in.

Even someone earning $20K a year (the average salary for a full-time cashier) and eligible for Obamacare’s rich “cost sharing subsidies” is still going to find coverage pricey. In Pennsylvania, which was the lowest cost of the four states, the annual premium will run $1,620 for a plan that still leaves them with a $600 deductible. In Illinois, that same plan will cost $2,868 annually with the same $600 deductible. Premiums alone will eat up a whopping 14% of their annual income.

Read the full report here.

1 comment:

  1. I know a lot of college students/young people who don’t know what all of their options are and in turn feel that their only choice is to sign up for Obamacare or pay a penalty. I was just having a discussion with a friend whose youngest brother is a college student facing this very issue and she told me that she gave him a book called “The Self-Pay Patient” by Sean Parnell. I was checking out his website, and it has a lot of great and helpful information for the insured, uninsured, people looking for info about self-paying, or even looking for alternative healthcare. It’s definitely worth checking out! Thanks for the article!