A recent CNN/Kaiser Health News story about a handful of young adults facing hardship under the Affordable Care Act paints a bleak picture: People old enough to smoke, vote, get married, fight in the military, drink, and even drive rental cars … cannot navigate health insurance.
Sure, health insurance is complicated. Wasn’t simplifying it one of the goals of the ACA in the first place? Wouldn’t the exchanges, or “marketplaces” if you prefer the Orwellian name, become the Kayak.com of shopping for health insurance?
Add this to the long list of the law’s broken promises, right after higher premiums, canceled plans, smaller networks, and higher out-of-pocket costs. The world of health insurance has not become a more simplified place. Instead, a web of government programs, subsidies, and taxes hovers over the already-confusing sector.
Washington Examiner (and Steamboat Institute) colleague Tom Rogan has already explained the cause of young adults’ ACA troubles, namely the rules requiring over-standardized insurance plans that subsidize the costs of older patients at the expense of the young. Mix this together with an ineffective individual mandate, and you’ve got a recipe for youth flight, imbalanced pools, and eventually, a death spiral.
On top of that, the so-called age-26 rule – so frequently credited as a benefit to young adults – has actually contributed to the high costs American youth face once they are on their own: If the few million young adults squatting as dependents on their parents' plan would instead shop for insurance on their own, this alone would bring an influx of mostly healthy, mostly low-claims insurance consumers, leading to lower prices across the board.
But we shouldn’t miss the cultural effects of the ACA on young people either – it’s not just the headaches of high costs. Culturally, the ACA sends the message that 25-year-old adult “children” (an oxymoron) should stay on their parents’ insurance.
In a time when more young adults than any time in recent historyare living with their parents, suffering from student-loan debt, and struggling to find solid jobs and form families of their own, I’m sure the age-26 rule was intended as a response to these new realities. But it’s fueled another problem: More and more young people are ignorant about health insurance because it’s not their responsibility. Why worry about it if you don’t have to buy it yourself? Then, wham! You turn 26, and you’re thrown into a market you may not understand.
Of course, the young adults featured in the CNN story are the lucky ones: They have parents with insurance who allowed them to stay on their plans through the maximum age. This isn’t always the case. Many young adults have uninsured parents, or for some other reason, can’t take advantage of the family plan.
My parents let me know – at age 22 when I took my first job – that I would take over a few bills they’d paid for me during college, including car insurance and health insurance. At first, this was intimidating. I didn’t know how to shop for any type of insurance, and I had to learn about deductibles, networks, coverage, and copays.
This was before the Affordable Care Act, of course. There wasn’t a Kayak.com at the time, but there was a health insurance equivalent that was just getting started: Ehealthinsurance.com. I shopped, compared plans, and ultimately purchased coverage there. The private sector was well on its way to making shopping for insurance easier to understand and navigate. My premium was less than $100 per month. My deductible was modest, about $2,700. And I opted out of maternity coverage to save money.
I got burned badly, of course, when the ACA became effective (2014). Like millions of other people, I got a cancellation notice in the mail. I was referred to healthcare.gov to buy a compliant plan, for about three times the premium (similar deductible). And of course, the user experience on healthcare.gov was, as they say, only “good enough for government work,” a shoddy replacement for private sector prototypes.
It shouldn't have to be this way. Young adults are capable of finding and purchasing their own insurance plans – or at least they once were. More of them would do so if the goods offered weren’t over-priced and over-standardized, by an antiquated, user-unfriendly government website portal.
Our generation has been spoiled with ever-more-customizable goods, services, and experiences. The Affordable Care Act made this kind of innovation impossible in health insurance, and worse, it told a generation that it was unable to be self-sufficient. Ultimately this has become a self-fulfilling prophecy.