5 Devastating Effects Obamacare Will Have on Young Adults

[oreo]

1. Premium increases. Obamacare imposes age-rating rules that increase premiums for young adults. The law allows premium costs to vary by a ratio of 3 to 1 based on age. But as Heritage research shows, “The natural variation by age in medical costs is about 5 to 1—meaning that the oldest group of (non-Medicare) adults normally consumes about five times as much medical care as the youngest group.” This means that under Obamacare, young adults will pay artificially high premiums, and older adults will pay artificially low premiums. Actuaries estimate that “the effect will be to increase premiums for those ages 18–24 by 45 percent and those ages 25–29 by 35 percent while decreasing premiums for those ages 55–59 by 12 percent and those ages 60–64 by 13 percent.”

2. Loss of coverage. Obamacare puts in place new rules that prohibit plans with annual limits. While limited health plans may not be a long-term solution, some coverage is still better than none. Several colleges across the country have already stopped offering low-cost plans to students because of the new regulations. For example, for the 2012–2013 academic year, one college offered a plan that cost students $445 a year with an annual limit of $10,000. But Obamacare requires a minimum cap of $100,000 this year, which would increase student premiums to more than $2,000 for the new level of coverage, thus making coverage through the school an unaffordable option. For the 2013–2014 school year, the minimum cap is set at $500,000, and after that, no payout cap is allowed. This will likely lead more colleges to drop coverage, since, as a Government Accountability Office study states, “Nearly all (96 percent) of the 194 student insurance plans we reviewed established a maximum benefit amount.”

3.Government takeover of student loans. A provision neatly tucked into the massive health care law is an effective nationalization of the student loan industry. Obamacare ends government subsidies to private lenders and puts the federal government in charge of originating and servicing federally backed student loans. As almost anyone is eligible for a student loan, Heritage’s Lindsey Burke explains that “these policies only exacerbate the college cost crisis, continuing a vicious cycle whereby college costs rise in tandem with ever-increasing federal subsidies.… Colleges will once again be able to increase costs, and students with easy access to low-interest loans will once again be able to pay.”

4. Less money for education. Obamacare’s massive expansion of Medicaid, which will add almost 20 million more Americans to the program, will be difficult to sustain on already strained state budgets. As states are forced to redirect a growing portion of their budgets to Medicaid, less funding will be available for other state priorities, such as education. The Medicaid expansion will increase state spending by an additional $64 billion through 2020, and it only gets worse as federal contributions gradually decline.

5. Crushing fiscal burden. Younger generations will be left footing the bill for Obamacare and its irresponsible spending. Despite his many lofty promises, President Obama’s law does not reduce health insurance premiums, spending, or the deficit. The latest cost estimate for Obamacare’s insurance provisions is $1.5 trillion over the next 10 years, which still doesn’t include a full decade of spending, since the most expensive provisions don’t begin until 2014. As the national debt approaches $16 trillion and the cost of Obamacare continues to rise, younger Americans will be saddled with crushing taxes to pay for it.

Five Devastating Effects Obamacare Will Have on Young Adults

 

[Oldguy]

Give it a rest. Obamacare is the law of the land. The GOP had their chance to convince us to ditch it and we declined.

It's not going anywhere, so get over it and step up to the table and help make it better.

 

[Greenbeard]

1. Premium increases. Obamacare imposes age-rating rules that increase premiums for young adults.

Young adults can buy catastrophic plans not available to older adults if they so choose. Those aren't subject to the 3:1 age rating ratio because they don't serve populations over 30.

2. Loss of coverage. Obamacare puts in place new rules that prohibit plans with annual limits. While limited health plans may not be a long-term solution, some coverage is still better than none.

"None" will not be the alternative when annual limits are finally phased out in 2014.

3.Government takeover of student loans. A provision neatly tucked into the massive health care law is an effective nationalization of the student loan industry.

The government "nationalized" the federal student loan program? You people are ridiculous.

Direct Loans were created 20 years ago.

4. Less money for education. Obamacare’s massive expansion of Medicaid, which will add almost 20 million more Americans to the program, will be difficult to sustain on already strained state budgets.

Perhaps not:

The additional state cost of implementing the Medicaid expansion is small relative to total state Medicaid spending. The incremental cost to states of implementing the Medicaid expansion would be $8 billion from 2013-2022, representing a 0.3% increase over what they would spend under the ACA without the expansion. The $8 billion includes the state share of costs for both newly eligible adults and the additional Medicaid participation among currently eligible populations that would result from expansion. If all states implemented the Medicaid expansion, federal spending would increase by $800 billion, or 21%, compared to the ACA with no states implementing the expansion.

Accounting for factors that reduce costs, states as a whole are likely to see net savings from the Medicaid expansion. Combining Medicaid costs with a conservative estimate of $18 billion in state and local non-Medicaid savings on uncompensated care, the Medicaid expansion would save states a total of $10 billion over 2013-2022, compared to the ACA without the expansion. Net state savings are likely to be even greater because of other state fiscal gains that we could not estimate based on 50-state data.

5. Crushing fiscal burden. Younger generations will be left footing the bill for Obamacare and its irresponsible spending. Despite his many lofty promises, President Obama’s law does not reduce health insurance premiums, spending, or the deficit.

Since I assume it's well-known that Obamacare does reduce the deficit (and we're just choosing to ignore that), I'm going to focus on the claim that it won't reduce spending. By repeating what I already said earlier today:

Obamacare doesn't take just one approach to cost containment. It accepts that incentives are broken at pretty much every level of the health care system and proceeds from there.

If your pet issue is overutilization/poor shopping for health services by consumers and patients, you'll be pleased to know the law is a boon for consumer directed high deductible plan-HSA pairs. It reduces the tax incentive for employees and employers to have overly generous benefit designs. It adds new transparency requirements for hospitals to make public a list of their charges for items and services they provide.

If you think costs increases can be traced to the insurance side, the ACA places limitations on the portion of premium revenue that can be spent on non-medical things (like the executive compensation liberals complain about). It brings new insurers into markets that have been devoid of competition, in part by seeding the creation of new homegrown (and consumer-operated) plans and in part by allowing existing insurers to sell across state lines in new markets.

It fixes deficiencies in existing insurance markets to ensure that consumers have the information and the structure needed to make meaningful choices and send clear price signals--shopping in the new marketplaces is going to make it very easy to see what you're getting with a new plan, what the prices are (and even your own likely expenses under a given plan), how the choices stack up in terms of quality, etc. The ACA also helps states to develop new insurance premium oversight mechanisms that, when used aggressively, have shown potential in being able to help hold down rising costs.

If you think costs are being driven on the provider side, the ACA is making a huge push to address the problems in organization and care coordination, etc that drive costs on the provider side. It would take way too long to go through all of what it's doing on that front but a major strategy in the ACA is to use Medicare reform to drive change by (1) shifting the way Medicare pays for services away from encouraging high-volume, low (or mediocre) value service provision, and (2) promoting and assisting health care providers in delivering better care more efficiently and less expensively, while holding them accountable for quality outcomes. You can see some of what's coming down the pike in results (i.e. slower cost growth, higher quality scores) from this private sector pilot in Massachusetts that incorporates some of these principles: http://www.usmessageboard.com/healt...-reform-model-lowers-costs-improves-care.html.

More importantly, there are some early indicators that providers have already begun to reorganize care delivery in response to the ongoing and coming reforms, accounting for some of Medicare's current record-low cost growth--and offering some promise that we might be entering a new era of cost containment.Obamacare tackles the biggest cost drivers, not just in Medicare but in the entire health system: the inflationary payment mechanisms and flawed delivery systems that have plagued the health system for decades.

If tort reform is your issue, the ACA offered federal money and assistance to help states find innovative ways to reform their own tort laws (the GOP Congress has refused to fund that provision of the law). Those who push for blunt force approaches to tort reform, like national caps on damages, miss the fact that many, many states have already tried caps on damages and the like. If there's money to be saved through tort reform, we're going to have to get smarter about how we do it by trying new approaches (e.g. health courts). That's why we need states to start experimenting with new strategies.

Those who say the law does nothing to rein in costs are just being silly: it goes after cost drivers at every level of the system. There's more to be done in the future but it's a hell of a start.

 

[Political Junky]

1. Premium increases. Obamacare imposes age-rating rules that increase premiums for young adults. The law allows premium costs to vary by a ratio of 3 to 1 based on age. But as Heritage research shows, “The natural variation by age in medical costs is about 5 to 1—meaning that the oldest group of (non-Medicare) adults normally consumes about five times as much medical care as the youngest group.” This means that under Obamacare, young adults will pay artificially high premiums, and older adults will pay artificially low premiums. Actuaries estimate that “the effect will be to increase premiums for those ages 18–24 by 45 percent and those ages 25–29 by 35 percent while decreasing premiums for those ages 55–59 by 12 percent and those ages 60–64 by 13 percent.”

2. Loss of coverage. Obamacare puts in place new rules that prohibit plans with annual limits. While limited health plans may not be a long-term solution, some coverage is still better than none. Several colleges across the country have already stopped offering low-cost plans to students because of the new regulations. For example, for the 2012–2013 academic year, one college offered a plan that cost students $445 a year with an annual limit of $10,000. But Obamacare requires a minimum cap of $100,000 this year, which would increase student premiums to more than $2,000 for the new level of coverage, thus making coverage through the school an unaffordable option. For the 2013–2014 school year, the minimum cap is set at $500,000, and after that, no payout cap is allowed. This will likely lead more colleges to drop coverage, since, as a Government Accountability Office study states, “Nearly all (96 percent) of the 194 student insurance plans we reviewed established a maximum benefit amount.”

3.Government takeover of student loans. A provision neatly tucked into the massive health care law is an effective nationalization of the student loan industry. Obamacare ends government subsidies to private lenders and puts the federal government in charge of originating and servicing federally backed student loans. As almost anyone is eligible for a student loan, Heritage’s Lindsey Burke explains that “these policies only exacerbate the college cost crisis, continuing a vicious cycle whereby college costs rise in tandem with ever-increasing federal subsidies.… Colleges will once again be able to increase costs, and students with easy access to low-interest loans will once again be able to pay.”

4. Less money for education. Obamacare’s massive expansion of Medicaid, which will add almost 20 million more Americans to the program, will be difficult to sustain on already strained state budgets. As states are forced to redirect a growing portion of their budgets to Medicaid, less funding will be available for other state priorities, such as education. The Medicaid expansion will increase state spending by an additional $64 billion through 2020, and it only gets worse as federal contributions gradually decline.

5. Crushing fiscal burden. Younger generations will be left footing the bill for Obamacare and its irresponsible spending. Despite his many lofty promises, President Obama’s law does not reduce health insurance premiums, spending, or the deficit. The latest cost estimate for Obamacare’s insurance provisions is $1.5 trillion over the next 10 years, which still doesn’t include a full decade of spending, since the most expensive provisions don’t begin until 2014. As the national debt approaches $16 trillion and the cost of Obamacare continues to rise, younger Americans will be saddled with crushing taxes to pay for it.

Five Devastating Effects Obamacare Will Have on Young Adults

Just imagine, the Heritage Foundation doesn't like ObamaCare.