Health insurance and health care have gotten a lot of attention in the US lately. Since the passage of the Patient Protection and Affordable Care Act (commonly called the ACA or ObamaCare), the federal government has released a litany of new regulations. These rules govern everything from which policies are offered to how research is funded to which drugs can get approved.
Due to the introduction of mandatory premium ceilings, we are now all held responsible for the higher costs of people in the state in which we live or company for which we work. This is good from an insurance perspective, because it spreads the risk, but it’s a nightmare from the perspective of a young person trying to afford insurance. When the average risk of a consumer base increases, that means premiums must also increase. Insurance companies need to be able to pay for the services they cover, and when they cannot charge certain people more money, they charge everyone more.
The consequence for most young people is that they see premiums skyrocket. When premiums skyrocket, healthy people drop out of the insurance market or select into different plans with different risk sharing. This is called a death spiral: when fewer healthy people buy insurance, insurance companies must raise premiums to cover their costs. Higher premiums mean more people drop out, and the people who are left with more premiums therefore buy even higher-price policies. It used to be that people could buy different policies with customized deductibles and coinsurance rates so as to fit their budgets. However, that’s now illegal.
A similar effect results from insurance packages required to cover more services. As you may have heard from the controversial protests of such a policy, the ACA requires non-grandfathered health plans to cover contraceptive services for women without cost sharing. Certain groups (religious employers and their affiliated health plans) have won exemption from the rule.
While it seems like a great thing to have your contraception covered for “free”, the consequences are again deeper than they appear. When insurance companies are required to provide any service without sharing the costs with consumers, the price mechanism is disrupted. Instead of seeing a price tag right away, we get fooled. No one likes to pay for things, so that part seems nice. The truth, however, is that we all still pay.
The actual cost of these services is still passed along to the consumer. Just because we don’t see the check right away doesn’t mean that there are no costs; instead, the true cost of the service gets added to our premiums and still ends up hurting our wallets. People have to pay for these services somehow, so they pass it along to those of us paying premiums.
These are just a few of the problems with the ACA. As the Exchanges open for business in October and other changes come into effect on January 1, we will continue to see the effect of third-party intervention and distortion. Everyone deserves to have the best health care, and the ACA will not help young people achieve that goal.
This is why my generation demands a true market for healthcare in this country.
If you’d like to speak with or book Sloane or any of our other Advocates, please contact Young Voices now.