How the Affordable Care Act Affects Young Adults
ObamaCare (the Affordable Care Act) allows young adults to stay on their parents plan until 26 and offers ObamaCare young adults cheaper health insurance due to cost-assistance through their State’s health insurance marketplace. Find out how young adults can save money due and no longer be denied treatment or coverage for being sick.
Thanks in part to ObamaCare most young adults will qualify for free or low cost health insurance through Medicaid or marketplace cost assistance subsidies, be able to stay on their parents plan, or be offered health insurance through work by 2016. Learn more about the official HHS report on young people and ObamaCare from October 28, 2013.
To avoid the penalty for not having minimum essential coverage in 2015 make sure you get covered, apply for cost assistance, and/or change plans during open enrollment. Open enrollment for 2015 starts November 15, 2014 and ends February 15th, 2014.
ObamaCare Young Adults Facts
All Americans, including young adults, had to obtain health coverage starting 2014, if they could afford it, or get an exemption. Here are some quick facts to help you understand what ObamaCare means for young adults:
• Young people can stay on their parents plans until 26.
• In many cases young people with limited incomes will be exempt from the fee and/or qualify for free or low cost coverage through the health insurance marketplace.
• 6 in 10 young adults will qualify for for coverage that costs $100 or less a month after subsidies.
• Not all insurance is created equal. Only minimum essential coverage (typically major medical, public, and job based insurance) will protect you from the fee!
• If you want cost assistance you’ll have to shop for coverage on the health insurance marketplace, if not you may find a wider selection of plans outside of the marketplace.
• In the individual and family market open enrollment is the only time you can switch plans or buy a new plan, this is true whether you use the marketplaces or shop outside of the marketplaces.
• For 2015 open enrollment goes from November 15th, 2014 to February 15th, 2015.
• If you don’t get covered by the end of open enrollment, or qualify for an exemption, you’ll owe a fee for every month you go without health insurance. Find out what to do if you miss the ObamaCare deadline.
• According to a July study by the Commonwealth Fund the uninsured rate for 19-to-34-year-olds declined from 28 percent to 18 percent, with an estimated 5.7 million fewer young adults uninsured.
• According to HHS all the people who enrolled in a marketplace plan during 2014’s open enrollment 28 percent were between the ages of 18 and 34.
• One-in-two young people technically have a preexisting condition they could be denied coverage for before the Affordable Care Act became law.
• One-in-six young adults has a chronic illness like cancer, diabetes or asthma.
• Nearly half of uninsured young adults report problems paying medical bills.
• Even if you don’t expect to use costly medical services having health insurance means you’ll have access to free preventive services, yearly check-ups, and will be guaranteed treatment and protected against unpayable hospital bills.
• If the lowest cost plan on the health insurance marketplace costs more than 8% of your income after subsidies you aren’t required to have health insurance. Learn more about the exemptions from the Individual Mandate.
• Up to 82% of uninsured young people will qualify for either Medicaid coverage or subsidies to purchase coverage through the Health Insurance Marketplace.
• Of the 18% of young adults who won’t qualify for cost assistance, only 15% will be left to buy unsubsidized private insurance due to employers offering coverage, student health insurance plans, and young people being able to stay on their parents plan until 26.
• Half of single young adults who are eligible to buy health insurance on the marketplace could get covered for $50 or less due to cost assistance. Cost assistance is only offered through your State’s Health Insurance Marketplace.
• More than three million young adults who didn’t have coverage before now have stayed on their parents’ plans until age 26.
• Only about 3% of uninsured young adults who will buy private health insurance won’t qualify for cost assistance like premium tax credits to lower premiums, cost sharing assistance for lower out-of-pocket costs, or Medicaid. Other uninsured young people will simply get their insurance through work due to the 2015 employer mandate or being able to stay on their parents health plans.
• In a recent study of nearly 2,000 young people, only 5% said they didn’t feel they would need health coverage. The majority of young people choose to have health insurance when an affordable option is offered through school or the workplace.
• 43% of uninsured are young adults between ages 18 and 35 (17.8 million). Although polls show different amounts, uninsured rates of young adults has decline consistently since the Affordable Care Act was signed into law. Get more information on the uninsured before the Affordable Care Act.
• You may have heard that young people aren’t signing up for ObamaCare. In fact almost 25% of people who have selected a marketplace plan are between the ages of 18-34. Get the HHS report on ObamaCare sign-ups.
• The cheapest plan isn’t always the best option. When it comes to health insurance the higher the premium the less out-of-pocket expenses you are responsible for and the larger network of doctors and providers you can utilize. All plans starting after 2014 are required to offer the same benefits, rights and protections but difference out-of-pocket costs. Learn more about how health insurance works and how to buy health insurance for 2014.
What the Affordable Care Act (ObamaCare) Does for Young People
The Affordable Care Act (ObamaCare) helps young adults in lots of ways. The truth is the new health care law has been in effect for 4 years already and so many young adults have already benefited from the new benefits, rights and protections (it’s a long list, click the link and check it out).
If the Affordable Care Act were actual medicine, it would be good for you! However, nothing is for free and in exchange for all of your new rights and protections ObamaCare also mandates that young people (along with everyone else) obtain health coverage starting in 2014.
Before we get to benefits, let us discuss the “ObamaCare Insurance Mandate.”
Young Adult ObamaCare Insurance Mandate
There is nothing new about insurance mandates. If you drive a car, you must have auto liability insurance or you cannot register it. In fact, driving without auto insurance is a crime in most states.
If you own a home, your lender mandates that you have homeowners insurance. You cannot get a mortgage without it. If you let it lapse, your lender will buy a policy for you and charge you for it. If you do not pay for it, you are subject to foreclosure.
We buy these mandated policies for the privilege of getting a license or a home, things of value. Health is a valuable asset too. And like car or homeowners insurance, we really prefer never to have a claim. But the reality is that we will become sick or injured at some time that we cannot predict.
The mandate for health care insurance was a recommendation of the conservative Republican party before President Obama made it part of his health insurance improvement law – The Affordable Care Act. Often, people call the Affordable Care Act, ObamaCare.
The idea of insurance mandates as being new socialist policy of big government proponents is simply a lie.
FACT: Most young adults (folks between 18-34) will find their best insurance option on their state’s Health Insurance Marketplace. That being said shopping around for quotes outside the marketplace will help you to understand what types are plans are out there, and will give you an insight into just how much the ACA is saving you.
What The Affordable Care Act Has Done for Young People So Far
Staying on Your Parents Plan Until 26
Under the Affordable Care Act young adults can stay on their parents plan until 26. Before ObamaCare became law, insurance companies were not required to cover adult children over the age of 18. So, most insurers removed adult children from health insurance coverage if the policy allowed for it. Under the ACA if you are under 26, you are entitled to coverage by your parent’s health insurance until your 26th birthday. Now, unemployed children, or children in low paying jobs that do not provide health insurance coverage or those under age 26 and employed but without health insurance benefits at work, have an affordable way to get health insurance. This rule applies to both married and unmarried children.
If a plan covers children, they can be added to or kept on a parent’s health insurance policy until they turn 26 years old.
Children can join or remain on a parent’s plan even if they are:
- not living with their parents
- attending school
- not financially dependent on their parents
- eligible to enroll in their employer’s plan
These rules apply to both job-based plans and individual plans you buy yourself, inside or outside the Marketplace.
Learn more about staying on parents coverage until 26 under the ACA here.
No More Pre-existing Condition Exclusions or Rate Hikes
Insurance companies counted birth defects as a pre-existing condition. A baby born with a mal-formed heart could not get coverage for repairs. This type of condition can require years of surgical intervention, but no insurance coverage since the condition is pre-existing. This is the extreme, kids and young adults with asthma, or diabetes and scores if not hundreds of medical problems fall into this insurance hole, and had no way to climb up and out the hole.
Under the Affordable Care Act, the insurance company cannot deny you coverage or raise your premium due to a preexisting condition. This means you will receive the medical care you need at the same cost for insurance as everyone else. Longer healthy living you can afford.
Elimination of Lifetime Caps
Before the Affordable Care Act was law, policies had lifetime caps. Simply put, if your cap was $2,000,000 you no longer had insurance the moment your insurer spent dollar number two million on you. Younger adults who come down with a sudden serious illness or are victims of an accident easily can reach that limit.
Worse, infants with serious diseases such as a birth-induced illness requiring surgery and special care units with prolonged hospital stays can run out of health insurance before they are two.
NOT ANY MORE – ObamaCare eliminates all caps. There is no limit to your insurance.
ObamaCare Insurance Costs for Young Adults
Your health insurance can costs can range from free or low-cost health insurance under $100 through cost assistance offered by your State’s health insurance marketplace to much higher rates if cost assistance isn’t available to you. What you pay is based off of what you make (ObamaCare works on a sliding scale), 82% of uninsured young Americans will be eligible for free and low cost health insurance come October 1st, 2013 through the marketplace.
To truly understand the cost of your health care you need to contact your state health insurance exchange, speak to a health insurance navigator, and get all the facts. A navigator is a specially trained person who knows what the ACA is and how it works. They exist to educate you about ACA; they are not rewarded if you buy a policy.
The number of uninsured young Adults has been declining things to the Affordable Care Act. Find out more about how ObamaCare has affected young people.
Getting Covered: Open Enrollment and Cost Assistance Under the Affordable Care Act
The best (and in many cases only) time to sign up for health insurance under the Affordable Care Act is during each years open enrollment period. During open enrollment you can sign up for subsidized private insurance through the marketplace and find out if you qualify for Medicaid. Outside of open enrollment most plans won’t be ACA-compliant and in most cases you won’t be able to get cost assistance. There are however some options for those trying to get coverage outside of open enrollment.
College students and recent graduates have several options for finding coverage in the Health Insurance Marketplace.
How Does the Individual Mandate Work?
The Individual Mandate works like this, most Americans who can afford health insurance either need to get coverage, get an exemption or pay a per-month-fee on their Federal tax returns.
Your tax penalty for not having insurance is paid on your taxes at the end of the year. If your taxable income is below 133% of the FPL you are exempt from this tax.
2014 = $95 per person per year or 1% of your Income
2015 = $325 per person per year or 2% of your Income
2016 = $695 per person per year or 2.5% of your Income
* See our page on individual mandate for specifics of how the fee works. It’s got a few extra details we only cover on that page.
Wellness and Prevention
ObamaCare has a focus on wellness and prevention. ObamaCare doesn’t just mean no out-of-pocket costs for essential health benefits, common preventive measures and yearly check-ups, the law creates funding for education on diet, tobacco use, sex, drug use, mental health and other things. Children born today have a life expectancy up to ten years less than their parents due to modern lifestyles. Check out this article on GMO’s in many domestic beers and this one about GMO’s being in school lunches.
Should I Buy Health Insurance?
The big question for young people is, “should I buy health insurance?” If you have coverage either through work, the government, private insurance or are under 27 and covered under your parents policy, then you don’t need to buy health insurance.
If you are uninsured and make less than 400% of the Federal Poverty Level you should see if you qualify for low-cost health insurance on your State’s marketplace.
If you can’t afford coverage, even with subsidies, chances are you will qualify for an exemption from the fee due to income or will be offered a free insurance option through Medicaid. There are very few uninsured young people who will find truly unaffordable insurance options on the marketplace.
Health insurance doesn’t just cost you money for nothing. ObamaCare offers a ton of new benefits, rights and protections that come with every plan and covers a certain percent of your medical costs and covers things like wellness visits at no extra charge.
Even if you already have coverage, it is a good idea to see what similar coverage costs through the state exchange. If you are under age 26 and not covered by a parent’s policy or other type of coverage you should see what your health insurance options are by 1) visiting your State’s health insurance marketplace 2) shopping around private health providers 3) or call a health insurance broker.
Will Young People’s Premiums Be High
Young people will see higher premiums under ObamaCare ( this before premium subsidies, which 82% of young uninsured have access to), while older Americans will see lower premiums on average.
Really what you will be seeing is the evening out of premiums due to per-exiting conditions and health status not affecting what a company can charge any more. In other words the cost is being spread out between the old and young. While this may seem unfair all things considered most young people will become old at some point and at that point it will be good they are paying less. Social security and Medicare are two programs that you pay into for later, and in a way the premium increase can be seen the same way.
The good news is that most young people will actually pay less at the end of the day do to about 82% of uninsured young people will be able to qualify for reduced premiums on their State’s marketplace.
They claim that healthy younger people do not need insurance –YOU DO. According to research done by the White House, Contrary to the myth that young people do not need health insurance, one in six young adults has a chronic illness like cancer, diabetes or asthma. Nearly half of uninsured young adults report problems paying medical bills.
The federal government will be giving subsidies to Americans who buy health care insurance and make less than 400 percent of the poverty level. For a single person that is $45,960.
Why Do I Need to Buy Health Insurance?
Suppose you do not purchase health insurance and become sick. Two things happen, everyone who treats you will expect you to pay their full charge amount, and you will have to pay a fine. Of the two, the fine is the smaller; it starts out low but escalates to a substantial amount over time. But, the cost of one round of medical care for an accident or extended illness can easily surpass your entire annual premium. ObamaCare makes health insurance affordable. Make sure to contact your state exchange to see how inexpensive it is before deciding to take a chance – the odds are not with you.
Cost-wise Buying Insurance Makes Sense for Young People
Many state exchanges have announced their rates. Many studies are finished concerning the costs of health insurance under the ACA. The conclusions are encouraging.
People aged 18 -24 are 36 percent of people getting subsidies. This is the largest of all the age groups. Tax credit amounts favor this group as well. This is where the largest dollar amounts of subsidies go. Premiums for a single person will be less than $100 per month, before subsidies. This premium amount does not include newly covered Americans by Medicaid and Medicare. The Medicaid programs are expanding in many states so that numbers of insured increase as do benefit levels. Many preventative services have coverage without copays or deductibles regardless of where the insurance comes from. Even birth control is a covered service for women who use medication or medical devices.
Often we hear that young people are well-informed shoppers and look for value and bargains. Marketplace health insurance under the Affordable Care Act, once you understand it, qualifies as a “no-brainer” purchase.
The Affordable Care Act and Young People