TOPICS > Health

Is Health Care Reform a Good Bargain or Burden for Young Americans?

July 23, 2013 at 12:00 AM EST
Under the Affordable Care Act, getting young people into the health insurance market will be critical to offsetting the cost of caring for older, sicker Americans. Ray Suarez gets two views on how health reform will affect young adults from Jen Mishory of Young Invincibles and Generation Opportunity's Evan Feinberg.
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JEFFREY BROWN: And we return now to our continuing coverage of issues surrounding the health care reform law.

Tonight, the pivotal question of enrolling young adults, as deadlines approach this fall.

Ray Suarez reports.

RAY SUAREZ: It was a meeting behind closed doors at the White House yesterday and it included a notable group, performers and actors like Alicia Keys, Jennifer Hudson, and Amy Poehler, all of whom offered their help in trying to sell the health care reform law.

The meeting is part of a continuing effort to gain public support for the Affordable Care Act and make sure seven million people enroll for insurance in the first year. The White House is working on multiple fronts to persuade Americans to sign up. That includes more appearances by the president to speak out about the law as he did last week.

David Simas is a senior White House adviser working on the effort.

DAVID SIMAS, deputy White House adviser: The first thing to do is really about raising awareness, making people clear about what the Affordable Care Act is and how it benefits them. So, that’s a phase that the president really began on Mother’s Day and we’re going to continue to ramp up through the summer.

RAY SUAREZ: Under the law, individuals must have health insurance or pay a penalty beginning in 2014. So far, 17 states will offer coverage through their own insurance exchanges. The rest will participate through a federally managed program.

Younger, healthier people are critical to balance out the older enrollees, who are often sicker and keep costs down.

DAVID SIMAS: We know that in order for us to be successful, to really make sure the marketplaces are effective, there’s a smaller subset that needs to really be at the center of our focus for outreach. And that’s about two million to two-and-a-half-million young and healthy 18-to-35-year-olds.

RAY SUAREZ: The challenge now, how to convince young people, most of whom are healthy, to spend money on insurance they may not think they need or can afford. There’s no recent comparable effort to the insurance campaign, but one that is frequently cited is the rollout of the prescription drug program for seniors known as Medicare Part D under President George W. Bush.

Former Health and Human Services adviser Keith Nahigian helped implement Part D. He says the Obama administration is running behind.

KEITH NAHIGIAN, former adviser, Department of Health and Human Services: It’s not pulling a lever like in the ballot. It’s not a vote. It’s a very expensive personal decision. You can’t just do that with a celebrity. You just can’t do that with a 30-second ad. You need to built that, and it takes years and thousands of events out in the community to do that. They’re starting too late. And this is a long process. And if they don’t get it together, it’s going to fail.

RAY SUAREZ: The health insurance exchanges are set to open October 1.

We get two views on getting young adults into the insurance market and how that may work under the new law.

Jen Mishory is deputy director of Young Invincibles, a group seeking to enroll more Americans in their 20s and 30s. And Evan Feinberg is the president of Generation Opportunity, a group of younger adults opposed to the law.

And, Jen, what do we know? What are the main reasons up until now before the Affordable Care Act that young people haven’t bought health insurance?

JEN MISHORY, Young Invincibles: Well, Ray, there’s a variety of reasons, one of which is really looking at access to insurance through your employer.

So we actually saw through the last decade that insurance rates and the offer of insurance to young people through their employer, the traditional way that we think of people getting coverage, dropped significantly. You saw actually a 13 percent drop in the last decade.

And so when young people don’t have offers of coverage through their employer and you have an individual market that frankly was too expensive, then you really do see really high rates of youth uninsurance.

RAY SUAREZ: Evan, in your view, does the Affordable Care Act answer any of those things that were keeping young people out of insurance?

EVAN FEINBERG, Generation Opportunity: Absolutely not. If anything, it exasperates those problems significantly.

Look, premiums for young Americans are going to nearly triple under Obamacare. And so it’s going to make health insurance that much more expensive for my generation. It’s a terrible deal. That’s why they’re having such a hard time getting young people to enroll, because young people know a bad deal when they see it.

RAY SUAREZ: So, Jen, give me your best pitch for people who are going to be faced with this new marketplace starting October 1 for why they should get in.

JEN MISHORY: Well, one thing I would add, Ray, is that there are about 19 million uninsured young adults. And of that population, about eight million of those could get Medicaid if all states expanded Medicare. Medicaid. And certainly we’re hoping that all states will.

Another nine million could get access to subsidies, so access to tax credits that you could get every month to bring your insurance cost down. And so you’re actually looking at rates that are going to be much lower. Take somebody who is, say, a 21-year-old going to community college who is working part time. He is maybe making $18,000, $19,000, $20,000 a year as he’s trying to put himself through school at night.

He’s going to be looking at premiums that are going to be $40, $50 a month with these subsidies. So, he is going to have new options that he never saw before.

RAY SUAREZ: Are you urging that student, the one that Jen just posited, to stay out of the marketplace and just take the fine or play with all the shortcomings that you identified with the Affordable Care Act as it is?

EVAN FEINBERG: Oh, he should absolutely stay out.

I mean, I looked at eHealthInsurance before I came over here. My hometown of Pittsburgh, Pennsylvania, there were 27 health care plans available to me that were under $100 a piece. The individual market is still going to be the better option for that person.

Look, young people are going to be used under Obamacare. Our generation is being asked — that’s the only way it works — to subsidize an older, wealthier generation’s health care. It’s simply not a good deal for us at all. We can continue to get affordable options if we pay the penalty and stay outside these Obamacare exchanges and just pay for our own health insurance.

RAY SUAREZ: Jen, even the law’s strongest supporters note that the numbers work when you get younger, healthier workers into the pool. So, is Evan wrong when he concludes that younger rate payers will help subsidize the care of older Americans?

JEN MISHORY: Well, I would actually add that young people will be buying their own health insurance.

And they will be buying individual insurance. The exchange is a free marketplace. They’re just going to be — for those who are lower income, they’re just going to be getting subsidies to actually purchase insurance, bringing those rates down.

Now, that is — it’s a new system. And it’s going to be a new day in health insurance. And that’s why we know that there’s a lot of work to be done to educate people on what’s coming.

RAY SUAREZ: Those plans that Evan has referred to as being much cheaper than the ones being offered under the Affordable Care Act, do they include all the same kind of coverage as you’re going to get in these state exchanges?

JEN MISHORY: Absolutely not. So, the state exchanges, the federal exchange, they are going to have a broader base of coverage.

They’re going to cover things like preventive care.

RAY SUAREZ: They’re required to under the requirements of the bill, right?

JEN MISHORY: They are. And they’re required to cover certain essential health benefits.

But, again, when you’re looking at a system where you get tax credits based on your income to actually purchase those plans, you can really see affordable options for the first time for a lot of young people who — a lot of young uninsured people are pretty low-income.

RAY SUAREZ: Evan, aren’t you making kind of a bet as a young worker that nothing terrible is going to happen to you if you are in a less-than-comprehensive plan because it’s cheaper?

EVAN FEINBERG: I don’t think so at all.

If you have got far lower premiums, you might have some exposure to some costs in the individual market, but, look, those insurance plans are good insurance plans that meet our budget and our needs. We don’t see the doctor as often. We don’t have as many prescriptions as our parents and grandparents do.

It’s not a bad deal at all for us to buy an insurance plan that doesn’t have all those gold-plated benefits that are meant for older, sicker people, when we’re — honestly, we’re younger and healthier. And the notion that within the exchanges that that’s not a bad deal for us, Young Invincibles themselves actually pushed back against the secretary during the Obamacare debate because they were looking for less of an age rating — or I should say less — a looser age rating ban.

They knew that young people were going to be charged more than their fair share to subsidize a health insurance plan for older, sicker Americans. It’s unfair and it’s bad policy. And it crushes us in our leanest years by taking more of our hard-earned wealth in order to subsidize those that have more than us.

RAY SUAREZ: The market opens in several months. That October 1 day is looming.

JEN MISHORY: Right.

RAY SUAREZ: Are you starting from square one with a lot of people in this age range about what is out there, what it means for them and what’s available to them now?

JEN MISHORY: Ray, I see two challenges.

The first challenge I see is making sure that young people who have never — or a lot of them have never actually experienced the insurance market, again for a variety of reasons — traditionally, there weren’t low-cost options available — really beginning to understand what insurance means, what a deductible is, what a co-pay is, how that impacts their choices and what choices they decide to make.

So, that’s one piece of it. And then the other piece of it is really making sure that young people really know their options. So, young people actually have a range of options and a range much different types of plans that all meet some of the baseline standards. So they’re going to have to be able to go in and decide what makes sense for them. And so we need to make sure that we’re educating young people on all of those things.

RAY SUAREZ: And if they decide they want to be in the marketplace, they don’t have to pull the trigger right away, right?

JEN MISHORY: That’s right.

So, open enrollment this year will start October 1. And it will run through the spring. So we do have a six-month period — and we’re starting now — but we have a six-month period to really make sure that we’re educating the population as a whole and certainly young people on new options and what’s going to happen.

RAY SUAREZ: So, where does that leave you? I mean, do you enter that same information marketplace and just tell people, don’t do it?

EVAN FEINBERG: Sure.

They’re trying to dupe young Americans into saying, well, this is going to be a good deal for you, because somehow that’s the crux. That’s how Obamacare works. If young people take a bad deal and enter the exchanges, well, then maybe older individuals can get health insurance.

RAY SUAREZ: But, Evan, isn’t that how insurance works, that people who don’t use benefits are in effect helping pay for those who do?

EVAN FEINBERG: No, no, that’s not how health insurance works at all.

Health insurance works by covering you in the event that you need health care services that you wouldn’t normally necessarily need.

RAY SUAREZ: But if pay $10,000 in premiums and get into a $50,000 accident, the money comes from somewhere, the people who weren’t in a $50,000 accident.

EVAN FEINBERG: Absolutely.

And that’s why we would encourage young Americans to buy an insurance policy that would protect them against those kinds of costs. But insurance doesn’t work by having prepaid health care for everyone and having young people pay a greater portion than they would otherwise use, so that older people who are necessarily going to use it.

That’s not insurance. That’s just a wealth redistribution scheme, where young people pay for older, sicker people. So, no, that’s not at all what young Americans should be interested in. They should be interested in real health insurance that meets their needs, that reflects their choices what’s best for them and their families.

RAY SUAREZ: Evan Feinberg, Jen Mishory, thank you both.

JEN MISHORY: Thanks, Ray.

EVAN FEINBERG: Thank you.