Could "Obamacare" be working?
That’s how many young adults had health insurance in 2010, as compared to 2009, according to the official estimates. Or, to put it another way, the proportion of 18- to 24-year olds without health insurance fell, by roughly two percentage points, last year.
It's pretty remarkable, given what was happening in the rest of the population. For every other group of non-elderly adults, from 35 through 64 years of age, the proportion without health insurance increased.
You expect that sort of data, given economic conditions: When people lose jobs, they also lose access to employer-sponsored insurance. When their incomes fall or their debts rise, they have a harder time keeping up with premiums.
But then why aren't 18- to 24-year-olds suffering the same fate? What makes them so special?
Nobody can be certain right now. Health insurance estimates are famously quirky and these data frequently mask critical information. But, as noted on Monday, the circumstantial evidence suggests, very strongly, that the Affordable Care Act is the primary factor.
Remember, one of the first provisions to take effect was a requirement that insurers allow young adults, up to age 26, to stay on their parents’ policies if employer-sponsored insurance is not available. Even though that requirement didn't kick in until the fall, several insurers began offering such coverage earlier, in anticipation of the new rule. Media reports, like this one from Kaiser Health News, have suggested large numbers of young people are signing up for the newly available coverage, even more quickly than the government had anticipated.
Brad Wright, a smart health care researcher now at Brown University, sums it all up in a post at his blog:
Historically, economic downturns coincide with increases in the number of uninsured, as people lose their jobs and, thanks to the design of our health care system, their insurance coverage. So, the unchanged number of uninsured masks what actually happened: Roughly 810,000 middle-aged adults, those ages 45 to 64, were likely let go from their jobs, didn't yet qualify for Medicare, and ended up uninsured. Meanwhile, some 494,000 young adults, those ages 18 to 25, gained coverage, which seems to point to the ACA provision allowing children to stay on their parents' plans until age 26 that went into effect in the fall of 2010. Of course, there may be other explanations, but the simplest explanation is likely the right one.Of course, the young adult provision is just one small part of the new health care law. The really big increases in insurance coverage won’t happen until 2014, when Medicaid expands to cover a much larger proportion of the low-income population and the federal government begins offering subsidies, plus the opportunity to buy regulated coverage through new insurance exchanges, to middle class people who can’t get employer coverage. And, I’m sure, critics would argue the gains in coverage either don’t make much difference or aren’t worth the harm the law would bring.
Still, these numbers are striking – and seem to suggest that the Affordable Care Act is already helping large numbers of people.
Bio: Jonathan Cohn is a senior editor at The New Republic. The opinions expressed in this commentary are solely those of the author.
This article caught my attention because it demonstrates the effect that Obamacare is already having on the US general population. While the US unemployment rate still remains at a high level across the nation, our health insurance is seeing some unusual changes due to the Obamacare legislation. Typically there is a high correlation between individuals being insured and the employment rate, due to the fact that the majority of Americans are unable to afford health coverage without the support of their employer. However, with the Obamacare legislation extending the eligibility age of coverage to age 26, more Americans are being insured under their parents insurance plans. While in the short run it is not having a large effect on the the demand for insurance coverage, once the employment rate stabilizes the demand for insurance coverage will significantly increase. With the Obamacare legislation in practice, it will cause demand for insurance to increase and shift to the right, therefore causing the price of insurance premiums to increase. When observing the overall effectiveness of the Obamacare legislation, one must wonder if insuring the entire nation is the correct step that needs to be taken, when assessing the overall cost to the nation.
ReplyDeleteThe statement below should come as no surprise to anyone:
ReplyDelete"the proportion of 18- to 24-year olds without health insurance fell"
The law basically cut the cost of insurance by a substantial amount for this group of individuals by allowing them to sign on to their parent's policy.
The true wisdom of this policy won't play out anytime soon.
The scenario policy makers are after is that these "young invincibles" would have otherwise gone uninsured and they wouldn't have kicked anything into pot at all. So reduced pricing (still profitable considering they probably won't utilize at this age) is better than them not joining into the pool of buyers at all.
The other effect they are after is that the "young invincibles" get used to having insurance, become educated on its value and continue utilizing the product in a responsible manner as they age up.
A thrifty, value seeking, educated and informed health care consumer with an eye for prevention is every policy makers dream.
Precisely, informed patients who are educated on the impact and cost of their care- make better decisions.
ReplyDeleteIt is why I favor high deductible with tax free Medical Savings Account, because it creates an incentive for the consumer to really think about their options. Frankly, patients drive up health care costs and providers have little incentive to stop them, within reason...due to the principle agent issue of both parties able to shift those costs primarily to a third party.
I believe the next step is to nationalize formularies for drug benefits to direct prescribing, with escalating co-pays. Informing providers, and giving patients reason to be invested financially in their health care decisions could have dramatic impacts on lowering projected costs in the future.
Movement from BCBS to penalize providers for bounce back admissions from hospitals within 30 days, as is CMS payment rates based on pay-for performance guidelines, are powerful incentives for providers to make more responsible decisions, as well.