Health care laws target young and healthy

They’re young, strong, healthy and make up 29 percent of uninsured Americans, according to the most recent reports from the Commonwealth Fund. They’re young adults, and some policy experts think they might hold the key to lowering the cost of health care.

In Indiana, young adults make up about 22 percent of uninsured Hoosiers, the single largest group in the state, according to the most recent reports by Families USA, a national nonprofit and bipartisan health care organization.

Why is there such a large population of uninsured young adults?

“The principle reason is affordability,” said Eric Wright, the director of the IU Center for Health Policy at IU-Purdue University Indianapolis, in an e-mail.

Young people who are just beginning their careers often do not have enough income to pay for health insurance, Wright said.

Also, young adults are usually very healthy, Wright said, and think they can do without health insurance.

“Many young people don’t imagine themselves getting sick, and for the most part they’re right,” said Dr. Richard Kiovsky, professor of clinical family medicine at the IU School of Medicine. “It doesn’t become an issue until something tragic happens, and all of a sudden you have all of these huge expenses.”

Also, young adults tend to change jobs frequently. Consequently, many companies do not offer health insurance with an appropriate plan for young people, Kiovsky said.
The fact that many healthier people choose not to buy health insurance has been one of the reasons for rising health insurance prices, Kiovsky said.

“When you’re young you think, ‘That’s not my problem; it’s your problem,’” Kiovsky said. “But the reality is when someone doesn’t have insurance, someone else is paying for it.”

The new federal health care legislation includes a provision that will require most citizens, young and old, to have health insurance by 2014 or pay a fine.

Is requiring everyone, including young adults, to have health insurance a good idea?
Kelley School of Business Professor Bruce Jaffee said he thinks so.

Having healthy young people pay for insurance at about the same rate as people who are older and sick will lower the overall insurance rate because the healthier insured population will offset the high costs of those who are sicker, Jaffee said.

“Those are the people who are really profitable for insurance companies,” Jaffee said, referring to the healthier and younger population.

Another change in the health care law that affects young adults is the expansion of Medicaid, which is federal government insurance for people with low income and disabilities.

Currently, Medicaid covers adults younger than 65 only if they have low income and suffer from a disability or have children, Jaffee said.

Under the new health care law, which will be enacted by 2014, Medicaid will be expanded and available to all adults, regardless of age, as long as their income is no more than 133 percent of the federal poverty level, which is about $14,404 for single adults.

“Expansion to me would certainly raise taxes and might raise expenditures,” Jaffee said, “but in my view, the benefits dramatically outweigh the costs.”

Jaffee acknowledged that the new law is not perfect, questioning the fact that the current health care system is based on employment.

“The whole concept is just nuts,” Jaffee said. “In every other industrialized country in the world, health care is a state or government responsibility.”

However, IU Economics Professor Peter Olson said he does not believe that requiring health insurance will be an effective way to lower overall cost or ensure quality care.

The fines people would have to pay as a result of not having health insurance might be cheaper than the insurance that is offered through the new law, Olson said.

“In that case, young, healthy people would be more likely to pay the fine than to pay for insurance,” Olson said. “They would choose whichever choice is cheaper.”

Jaffee said health care reform should not be left in the hands of the insurance companies. 

“They had their chance, and we have a system that’s a failure, and part of the failure is through the insurance companies,” Jaffee said. “To expect us to put trust in the people who screwed it up is just bizarre.”