Wednesday, March 25, 2015

Among Millenials, Penalties for Not Having Health Plan Discourages ObamaCare Enrollment

One of the ObamaCare incentives for getting people to sign up for exchange plans was to tell uninsured people to have a plan – or pay a penalty. Surely, the reasoning went, people with take the lesser of two evils - a plan, particularly if it were subsidized, but not a penalty. But the young and healthy are saying no thank you, I’ll just go without.

According to a McKinsey and C. survey of 3,007 uninsured and individual adults ages 18-34, most uninsured prefer to pay the penalty rather than enroll. Part of the reason may be because 41% of uninsured do not even know a penalty exists, or because the millenials are having a tough time finding gainful employment.

When informed of the penalty, which was $95 or 1% of income in 2014m only 12% changed their mind and decided to enroll.

31% said they didn’t need health insurance and the penalty was less than coverage.

26% said they believed in health insurance but the penalty was less than than coverage.

15% indicated they didn’t believe in the law.

There may be other factors as well. The young may believe they invincible and will remain in good health. In millennial minds, these plans are not a good deal, when you can’t afford them, when ERs will have to accept you, when you can get your plan after you fall ill, and when the IRS isn’t going to be able to enforce the $95 penalty anyway.

More of the young are part of the boomerang generation. They are returning home to live with their parents. Across population groups, they have the highest rate of unemployment, often over 15%. Jobs are in short supply, and more and more jobs are part-time, partly due to ObamaCare policies that encourage discourage full-time employment. Many of the young have staggering credit card and education debts. Tuition costs are high. Financial aid is dwindling. As a result of all of these things, many of the young are going back home to live with their parents or never leave.

In the words of one millennial, Evan Feinberg of Nevada,

“We’re young but we’re not stupid...only 22% of Nevadans signing up are between ages 18 and 34, a far cry from the 40% the White House wanted…Blame the ObamaCare marketing team. The team’s efforts to persuade us to sign up have been inappropriate, incoherent, and simply insulting.”

Because of economic headwinds, a high rate of unemployment, Obama is losing support among white millenials. According to Gallup, approval has dropped from 58% in 2008 to 34% through November 2014. In the midterms, the millenials favored a GOP-led Congress.

Over all, of those signing up for ObamaCare through the exchanges , only 28% were between 18 and 34%, far short of the Obama target of 40%. This is distressing because the young and healthy were expected to be a main source of revenue and were expected to keep premiums down for older and sicker persons. Among the young, the main deterrents for not enrolling were high costs, lack of value of benefits, and irrelevance to their health needs.

No comments: