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What Health Care Reform Means for: ‘Young Invincibles’

Young people often forgo insurance coverage. Reform bills would no longer allow that, but what insurance they could get and how differ in each proposal.

Using results from a questionnaire we did with American Public Media’s Public Insight Network, we’re looking at how the proposed health care reforms will actually affect people facing common health care coverage situations. See our previous posts on what health care reform means for Medicaid Recipients, the uninsured, the underinsured, small businesses, those enrolled in Medicare programs, and the insured.

Neil Thurgood, 26

Location: Washington, D.C. Health Care Status: Insured through his wife Household Income: $65,000

His Story:

When Neil Thurgood graduated college in the fall of 2006, his health insurance lapsed while he looked for a job. At the time, he says, “I just kind of figured, I’m young and healthy and everything is cool,” so he didn’t worry when it took longer than planned to find a job. His wife eventually got one that offered insurance, but the premium was still too expensive for Thurgood to be covered.

That wasn’t a problem until January 2007, when Thurgood came down with what he now refers to as “some crazy renegade virus,” which landed him in the hospital with a fever of 105. A spinal tap and a day later, Thurgood was sent home with fuzzy understanding of why he was sick and a bill for about $6,000.

Nearly three years later things are looking up for Thurgood. He’s landed a job and is now insured through his wife’s coverage, which costs them $260 a month. But he’s still paying down his hospital debt.

“I feel bad having those kinds of obligations outstanding,” he said. “It’ll be paid when it’s paid.”

Thurgood is part of the group called “the Young Invincibles.” Young adults between 19 and 29 have the highest uninsured rate of any age group – they aren’t as worried about getting sick, they’re less likely to have jobs that will offer insurance, and they typically make less money than other age brackets so they can’t buy private insurance. In the last year, 47 percent of people between age 19 and 34 went without health insurance at some point, and one in three is uninsured now.

What Health Reform Means to Him:

A series of changes offered by both the House and Senate’s reform bills mean the “invincibles” will have more options for insurance – whether as a dependent on a parent’s insurance, Medicaid or as a purchase through an exchange — but one option that will no longer be available is skipping health coverage.

For relatively well-off young people, like Thurgood and his wife, health care reform will mean a new health insurance requirement, but not much help affording it.

Both health reform bills mandate that everyone has insurance, which means young adults wouldn’t have the option of staying uninsured unless they want to pay a fine. The House bill would fine them either 2.5 percent of their adjusted income ($1,624 for the Thurgoods) or the price of the lowest premium on the exchange, whichever is lower. The Senate bill would phase in a penalty over the next six years, eventually fining them $750 a person, or $1,500.

 As of now, coverage from a parent’s private plan or through a public program that covers children usually ends at age 19. But the both the bills extend the age that children can remain as dependents. The House extends it to the child’s 27th birthday, and the Senate extends it to the 26th.

For the poorest group of young people, Medicaid may be an option. The program does not currently cover young adults without a child or a disability, except for in 15 states that have waivers, but that’s about to change. Both the House and Senate bills would extend the population that they cover to include childless adults. (See our coverage of Medicaid and young adults.) The Senate bill also expands Medicaid to cover up to 133 percent of the federal poverty line (about $14,000 for a single person) starting in 2014, and the House bill expands it to 150 percent, or about $16,000, in 2013.

But at his current household income, Thurgood wouldn’t qualify for Medicaid.

If he decided he didn’t want to use his wife’s insurance, both bills would allow him to purchase health insurance through an exchange. However, it’s not clear how much exchanges will benefit healthy young people who earn too much to also qualify for government subsidies.

The House plan would create a national exchange, and the Senate plan would create state-based exchanges. The exchanges function like large pooling mechanisms, allowing people who would normally buy insurance through the individual market to buy into one of a menu of private group plans. The House bill also includes a public option – but that did not make it into the Senate version, and House leaders have indicated a willingness to drop it.

If he’s buying through the exchange, Thurgood could choose the Senate’s “young invincible” option, which offers people under 30 bare-bones coverage for a discount price — a possibility that would no longer be open to others who buy through the exchange, since levels of benefits will be set by Congress.

Lower-income young people who qualify for subsidies would probably skip the “invincible” option, because they could buy better insurance with government help, as the Congressional Budget Office has pointed out.

But the Thurgoods earn too much to qualify for subsidies, so buying coverage through the exchange may not help them much. The Thurgoods are above the income threshold to qualify for subsidies for premiums that are offered under each plan, which is 400 percent of the federal poverty line, or $58,280 for a family of two by 2009 standards. (Read our coverage of premium subsidies.)

MiddleAgedMama

Dec. 22, 2009, 4:23 p.m.

I think we need to pursue the question of what it means for insurance to be “too expensive.” When Thurgood fell ill, he’d had insurance available to him through his wife, but he says it was too expensive. I’d want to explore a bit about their lifestyle—what did they spend their money on instead of protecting his health? Do they have a flat-panel TV, do they eat out once a week, do they take vacations each year? In all the debate about health care, I haven’t heard anyone talk about reordering our priorities and paying for things in order of importance. If our nation spends on average $7K per person per year for health care, we have to be prepared to pay that much in premiums. So as we work to bring down that annual number (which of course we have to do) we also have to find the will to pay it, even if it means giving up some of our “lifestyle” that we love so much. In another era, those things were called “Extras” to be had only after the essentials were covered. Sounds like the Thurgoods did not cover their essentials.

MiddleAgedMama:

So, in other words, we should spend all of our income subsisting instead of enjoying the fruits of our labor?  Is it your opinion, the fruits of our labor should go toward subsisting so we can keep working to subsist?  Never mind enjoying things, things that nourish the mind and soul, your view is to be thankful we live so we can . . . subsist. 

This bill was the wrong solution.  Why are insurance companies considered a necessary part of the health care system?  All insurance money should be paid to the government, and all premiums identical, perhaps based on some small percentage of income, which would create a big pool of funds for health care, not motivated by profit.  That would be the means to be the absolute cheapest.

MiddleAgedMama

Dec. 22, 2009, 6:06 p.m.

I actually agree that we need a single payer system. I think it’s absurd that our society guarantees everyone a basic education but not basic healthcare.

And my point was not that we should all be reduced to subsistence level. My point was that we all make choices in life, and we’ve gotten spoiled by our own consumerism. We have very high expectations of what our comfort level should be, and what possessions we should have, and we’re not taking care of what we need first before we spend on what we want. Someone else in this position might have done the responsible thing and paid for the insurance, and done without some extras—that’s one way to be young and just starting out. I don’t know that—I only know what’s in the article, which is why I said I’d want to know how this couple spent their money, and what choices they made instead of paying the premium. And what choices are they making now, two years later and still not having paid off the $6K? Are they scrimping and saving to pay the debt? He sounds rather cavalier about it—hey, maybe he’s not, maybe he just sounded that way. But I know my premiums and my tax dollars are subsidizing his bad debt.

The system is rotten to the core, but I do think we need to adjust our expectations. (We may as well, since our famous American lifestyle is going to be adjusted downward in the 21st century, like it or not.) But our life today is unsustainable—we expect high wages but low prices, and we expect our insurance premiums to be low but our retirement funds that are invested in insurance companies to pay a high return. It just doesn’t work.

I’m actually in agreement with both Alric Knebel and Middle aged Mama. After retiring in 2008, I moved back to Canada. I’d been in the States since I was 3, but have been heartily sick of it since my stint as an infantryman in Vietnam in 1971. The propaganda that U.S. citizens live with on health care, energy, food, the state of world affairs, and almost any subject, is really incredible. Most of the industrialized world [not to mention the long suffering 2nd and 3rd worlds!!]
look at the States in a far different way than Americans look at themselves. Healthcare and the insurance corporation’s sway over the debate, is just one of the many areas where Americans allow themselves to be bamboozled by corporate rapaciousness. I’m sorry that my kids still live there, but I’m very glad I don’t!

powermuffin yeah

Dec. 24, 2009, 12:28 a.m.

Guess people just couldn’t get enough of FICA…. let’s call this FICA II?  A quote from the article” but one option that will no longer be available is skipping health coverage.”

Ok, when we buy a house we need house insurance, when we buy a car we need car insurance.  But we always have the options of RENTING…..and a choice of borrowing…. as well as a choice of not buying the house the car.  Keep in mind that these things add values to our life, for our own enjoyment.

Now, for ourown health care we need the government to step in to add yet ANOTHER “NECESSARY” EXPENSE on to our life?? and they call this is helping the middle class??  LOL, this is hilarious. 

Your options for FICA II is either to pay, to be punished, or simply choose the option of not buying the house(to forgo of your life).....

In response to “powermuffin”, please read my post regarding [ The propaganda that U.S. citizens live with on health care, energy, food, the state of world affairs, and almost any subject, is really incredible]
  This health care bill was the best Obama could do since the U.S. Congress is owned by the insurance and other corporate entities. Canada is no exception. Here, the American and internationally controlled corporations own as much of the Canadian Parliament as they do the American government.
There is nothing new in this arrangement. It has been going on since the first chieftain got together with a shaman to manipulate the tribe. The tribe is just bigger now, and the propaganda machine is more sophisticated. All of this will shake out as the price of energy reaches deeper into the 1st world’s pockets. As it becomes too expensive to drive to the store, or to work for that matter, everything will change, and likely not for the better for anyone still hanging on to that consumerist dream.

Johns Hopkins student explains how health care reform (and other democratic reforms as well) is a bad deal for young people. Very interesting: http://media.www.jhunewsletter.com/media/storage/paper932/news/2009/12/03/Opinion/Youth.Of.America.Unite-3845435.shtml