The media narrative has implied that a large number of young Americans will face “rate shock” once Obamacare goes into full effect. The idea is that young people will be forced to pay higher premiums (to the tune of 60 or even 80 percent higher than current rates) in order to subsidize older, sicker Americans’ care, since insurers won’t be able to turn those customers away thanks to the law’s consumer protections. But these concerns are likely overstated. Analyses show that only a tiny portion of well-to-do young adults will actually experience premium hikes under the health law.
The arguments for “rate shock” ignore the actual demographics of the individual market — and consequently, underplay how few young people in this pool will actually be affected. As one report from the Center for American Progress shows, only three percent of all young adults would face any premium increases under Obamacare:
That’s because almost half of young adults already receive coverage through their employers, 14 percent have public health insurance, 28 percent are uninsured and will gain coverage for the first time in 2014 thanks to the law, and seven percent will qualify for federal tax credits to buy coverage on Obamacare’s insurance marketplaces.
None of these populations will be affected by premium increases — in fact, the only young Americans who may have to pay higher premiums are those who make over 250 percent of the Federal Poverty Level ($28,725), yet don’t have insurance through their employer. That’s a tiny pool that consists mostly of the self-employed, such as consultants and contractors. An Urban Institute study similarly found that two-thirds of all young people between the ages of 21 and 27 will either have public health insurance or receive subsidies to buy coverage on a marketplace, and two-thirds of the remaining pool are under age 26 and can stay on their parents’ insurance (also thanks to Obamacare).
There are legitimate obstacles that young Americans will face under the Affordable Care Act. Since the Supreme Court ruled Obamacare’s Medicaid expansion to be optional, many GOP-led states have refused to participate in it, denying millions of poor, young adults basic health coverage. But as far as individual health plans go, 97 percent of young adults will either get new coverage, cheaper coverage, or not see their health insurance change at all.