Why Twentysomethings May Reject the ACA
In fact, many are woefully uninformed - lacking even a basic understanding of how health insurance works or of health insurance terminology such as "deductible," "premium" or "co-pay."
But come January 2014, that will have to change.
That's when the bulk of the federal Affordable Care Act takes effect, under which young adults face new requirements for having health insurance - including being slapped with penalties for not having it.
"Right now this generation has very low levels of insurance literacy, precisely because there were so few good options before," explains Tamika Butler, California director of Washington, D.C.-based Young Invincibles, an organization that seeks to expand opportunity for Americans between the ages of 18 and 34.
According to Young Invincibles, young adults remain the most uninsured age group in the country. Here's a snapshot of the statistics:
- 29% of 18- to 24-year-olds and 26% of 25- to 34-year-olds are uninsured.
- By gender, 29% of men and 26% of women in these age groups lack insurance.
- In California, the numbers are far higher than the national average - with 31% in this age group lacking health insurance. In Los Angeles County, the figure jumps to 39%.
Statistics like these have organizations like Young Invincibles, as well as the insurance industry, and federal and state officials, all focused on young men and women this year in an attempt to get them signed up for health insurance.
Young Invincibles recently launched a nationwide campaign called Healthy Young America, under which its been holding grass roots events across the country to educate twentysomethings about the Affordable Care Act and the various low cost insurance options that will be available come January.
The organization has also developed an app for mobile phones that both helps find doctors and helps twentysomethings understand healthcare terminology.
"We really feel like getting young people insured is going to help everyone," Butler says. "You need young folks in the insurance pool to bring costs down for everyone. And young folks are really leaders. So we know young people are going to be this gateway to other folks in their community getting health insurance."
There are three primary options available for twentysomethings when it comes to health insurance under the Affordable Care Act:
- Stay on their parents' health insurance if they are under 26
- Access a health plan through their employer
- Purchase health insurance through the health insurance "marketplace" created under the Affordable Care Act. The marketplace is the new, website-based mechanism to find insurance. Each state may set up its own version of the marketplace or use the federal version, or customize the federal version for state use. Applicants won't have to worry about being denied because of health problems. The Affordable Care Act guarantees coverage to anyone who applies for a policy.
But here's where economic reality sets in.
For the first few years under the Affordable Care Act, the penalty for remaining uninsured is not that steep. In 2014, for example, the penalty is just 1% of annual income or $95 dollars, whichever is greater. (The penalty is paid when filing taxes in April.)