Study: 6 out of 7 Millennials better off not buying health insurance

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A monetary penalty is not going to be enough to persuade young people to register for health insurance under the Affordable Care Act, as a new study from the American Forum found that 86 percent of young-adult households would benefit financially from opting out of Obamacare.

After examining the potential for subsidies and cost-sharing, the American Action Forum found that 6 out of 7 young-adult households would be better off foregoing health insurance coverage, opting instead of pay the fee associated with not having health insurance. Additionally, the organization learned that it is most financially advantageous for Millennials to pay for their health care costs out of pocket.

“…but the overall finding is constant; the majority of uninsured young adults will benefit financially from opting out of coverage in 2014,” the study states.

In 2014, the first year of Obamacare’s implementation, young people who choose not to seek health insurance coverage — through either their employers or the Affordable Care Act’s marketplaces — must pay a $95 fine. The fee increases with each passing year: to $325 or 2 percent of one’s income in 2015 and $695 or 2.5 percent of one’s income in 2016.

However, American Action Forum found that despite the penalty’s climbing price tag, young people save money by choosing not to purchase health insurance. Seventy-one percent of young-adult households would find it financially advantageous to forego coverage in 2015, compared to 62 percent the following year. That percentage increases to 66 percent in 2019.

American Action Forum’s findings coincide with a campaign spearheaded by Generation Opportunity called Opt Out of Obamacare. The nonprofit seeks to educate young people on how the Affordable Care Act negatively affects them and asserts that “opting out” is the smarter choice.

““This study confirms what young people already know: Obamacare is a terrible deal for us,” Generation Opportunity spokesperson Corie Whalen  said in a statement to Red Alert Politics. “Overwhelmingly, we are choosing to opt out of Obamacare and purchase affordable, private insurance outside of the government’s expensive exchanges.”

The price of premiums for young people under Obamacare is expected to increase by an average of 260 percent, as Millennials’ enrollment in the law’s exchanges is needed to “create a balanced risk pool.”

According to the most recent figures from the Department of Health and Human Services, only 24 percent of those who selected a plan through the Affordable Care Act’s exchange were between the ages of 18 and 34. The Obama administration set a target of 40 percent by the end of the open enrollment period — March 31. To prevent a “death spiral,” or an increase in premiums for all enrolled, 2.7 million “Young Invincibles” must seek coverage through Obamacare.

“Through its insurance market reforms and overly prescriptive benefit design, the ACA makes the decision to purchase health insurance more costly than it previously was for the vast majority of young adults, while at the same time significantly reducing the risks associated with the decision to go without coverage,” the study states. “Whether young adults make the decision to purchase health insurance will depend on many factors, but the perverse economics of the ACA discourages young adults from joining the health insurance system.”


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