Who Are the Young Invincibles?

The Affordable Care Act (ACA) – often referred to as Obamacare – is the Federal government’s plan to make health insurance accessible to all. The success of the ACA rests on the young invincibles participating. Let’s take a look at who the young invicibles are, why they are so important to the success of the ACA and the current outlook on the participation of the young invincibles.

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Will young adults sign up for the ACA?

Who Are the Young Invincibles?

The term “young invincibles” describes a group of healthy young people who are between the ages of 18 and 35 years of age. Currently, there are an estimated 20 million people who fall in this group. The Federal government needs an estimated 1.7 million of those to sign up for health care coverage.

Why are the Young Invincibles Important to the ACA?

The reason the federal government needs 1.7 million of the young invincibles to sign up for health care coverage boils down to money. Unlike the elderly and chronically ill who will incur high medical expenses, the young invincibles are unlikely to require a lot of medical care and such will cost health insurance companies less. The young invincibles’ health insurance premiums are needed to basically fund and balance the high medical costs of the elderly and chronically ill. If the young invincibles don’t sign up for health insurance, everyone else’s rates will go up.

What’s the Problem?

Before the ACA, health insurance companies generally denied coverage for pre-existing health conditions. The ACA now mandates that insurance companies must cover all pre-existing health conditions. This mandatory coverage comes at a cost. The health insurance companies now have to cover treatment for cancer, heart disease and other chronic and costly illnesses. In order to offset the costs of this coverage, the health insurance companies have raised the rates for the young invincibiles, and this is where the problem lies. Health insurance premiums for the young invincibles has risen post ACA on a national average of 260 percent.

Will Young Invincibles Participate in the ACA?

We won’t truly know if the necessary 1.7 million young invincibles will sign up for health care coverage until January 2014, when the health plans under the ACA take effect. It’s not looking so bright at this point, however. The American Action Forum polled young invincibles and found that 45 percent of would drop or fail to sign up for health care coverage if their premiums were to increase by 30 percent, instead choosing to pay the government penalty. However, this may eventually change. In 2014, the penalty for failing to sign up for a health care plan is 1 percent of a person’s yearly income or $95 per person. The penalty will increase to 2 percent of the person’s income or $325 per person in 2015, and 2.5 percent of person’s income or $695 per person in 2016. As the penalty increases, more people in the young invincible group may find it financially beneficial to sign up for health insurance.

The Bottom Line?

The ACA has succeeded it making health care accessible to the chronically ill and elderly who previously could not qualify for health coverage, but it has taken a big hit on the young invincibles. Their rates have soared. Can we expect them to take brunt of the costs for the good of the rest of the population? If they don’t, the ACA may just fail. Right now, all we can do is let it all play out and see what happens.

 

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