Young Americans all across the country are getting what they voted for but not what they hoped for. While President Obama promised to cut health insurance premiums, rates are scheduled to nearly double for recent college graduates.
Health insurance companies are scrambling to set up the new rates before the entirety of Obamacare comes into effect. In complying with the law, insurers are trying to shift as much blame away from their operation as possible and illustrate the catastrophic implications Obamacare will have on their industry. Many companies are worried about losing potential customers in the market due to rising costs and “rate shocks.”
“We’re very concerned about this,” said Alissa Fox, a Senior Vice President at the Blue Cross Blue Shield Association, which represents 38 independent insurers.
Insurers will be required to offer more detailed coverage than they currently provide. Costs will also increase because they cannot reject applicants due to pre-existing conditions, and providers are no longer allowed to charge people who are older significantly more than younger customers.
Recently the CEO of Aetna, Mark Bertolini, stated, “If we’re going to insure all Americans, which is a worthy and appropriate cause, then somebody has to pay for it,”
That “somebody” is younger, healthier Americans. Students who recently graduated college and young people in their early 30’s are going to be expected to pay higher premiums in order to expand access for more people.
These higher rates only present another hurdle for young people trying to find work and become self-reliant. With youth unemployment almost 40% for those aged 20-24 and millions of young people living at home with their parents, Obamacare is quickly becoming a nightmare for young Americans.
According to a recent survey of insurers released by Douglas Holtz-Eakin, President of the American Action Forum and a former director of the Congressional Budget Office, a health insurance policy for a young, healthy man could triple from $58 per month to $175.
Many insurance companies fear that these rising costs will deter young people from entering the healthcare market. As alternatives to buying healthcare, some young people are considering paying the penalty, for it may be cheaper than buying the actual coverage. The penalty may be as low as $95 for many young people in 2014, which is dramatically lower than paying $175 for insurance.
The supposed premise of the “Affordable Healthcare Act” is to tackle the problem of access to healthcare by mandating people to buy health insurance when the problem with healthcare has not been access but cost. History teaches us the only way to solve the problem of cost is not to subsidize the issue but rather open up the market for competition.
The intentions of Obamacare may have been to cut costs and expand access to healthcare, but we are quickly learning that good intentions don’t necessarily translate into good public policy.
Charlie Kirk, age 19, is the founder of Turning Point USA.