Thanks Obamacare: Unhappy 26th birthday to me

Birthday CakeToday is my birthday, and according to ObamaCare, it’s a banner year: I’m no longer an ‘adult child!’ While I’ve been buying my own insurance for several years now (until it got canceled), this 26th birthday gives me some insight into what my peers experience as they navigate the world after they reach that magic age of 26.

Why is 26 such a big deal?

It didn’t used to be. Turning 18 has always been a big one, as is 21 and 30. But 26 became another important threshold year when the new health care law required insurers to allow parents to keep adult dependents on their health plan until age 26. It’s one of the most popular provisions in ObamaCare, with 61 percent of Americans in support. This ‘age-26 rule’ has been celebrated for helping more than 3 million young adults gain insurance coverage.

But blow out those 26 candles, and the world becomes a darker place. This popular provision isn’t much help if you are exactly 26 or slightly older. In fact, it hurts. By attracting so many young adults away from ObamaCare’s individual insurance pools, this rule is contributing to higher premiums for the rest of us.

Those higher premiums further discourage enrollment. Trust me, I’ve seen it happen.

I’ve sat down with friends who are now armchair actuaries, trying to make an assessment — as health insurance companies once did — about their risk level. They say things like, “Can I make it for a couple months without insurance?” If only the new job started before he turned 26. A little peace of mind would be nice, but it’s not worth $300 a month.

Those high premium prices drive many 20-somethings out of the individual market, which in turn can push premiums higher, as pools skew older and less healthy than planned. Analysts had assumed that about 40 percent of enrollees would be between 18 and 34 years old, but so far only about 24 percent of the pool meets this description. While this probably won’t cause an all-out ‘death spiral,’ it is concerning to ObamaCare’s planners.

Ironically, if the 3 million+ young adults who are newly insured as ‘adult children’ had bought their own ObamaCare insurance instead, meeting enrollment targets would be easy.

But ObamaCare advocates are hoping subsidies and tax credits will be the bait, easing the transition to the healthcare marketplace for low-income youth — as well as low-income older people. This may help a bit.

I have peers who’ve qualified for generous subsidies, some of whom aren’t even poor. They’re in Ivy League graduate schools or T14 law schools, and as students, their incomes appear low. Is it fair that middle-class taxpayers subsidize their health insurance, even though they will graduate to six-figure salaries? That’s not how the subsidies were sold. But some well-to-do young adults are taking advantage.

More irony: The appealingly low, subsidized prices low-income youth can find — about $80 – are close to the unsubsidized prices young adults could find before ObamaCare’s regulations drove price increases for the young. So what’s the harm? Well, using a subsidy scheme still means somebody pays, and if it’s not us today, then it’s us tomorrow, when our salaries — God-willing — are higher.

Besides facing the higher cost of independence at age 26, many people are likely to see a decrease in the quality of their health plan as they move from a parent’s Employer-Sponsored Insurance plan. Many young adults struggle to find their own ESI, since about half of America’s unemployed are under age 34, and even then only about 50 percent of private-sector firms currently offer health insurance as a benefit.

If you can’t find ESI, and you head to one of ObamaCare’s exchanges, be advised: doctor networks and drug formularies are more restrictive. Also, mind the deductibles.

The fact is that “young adults” are in a variety of circumstances, experiencing some of the most dynamic shifts in our careers and family lives. Each person will experience ObamaCare’s impact differently, depending on a dozen questions, such as: Are you employed? Are you married? What’s your income? Are you generally healthy, or do you suffer from a condition?

But another important question now is this: Are you above or below the age of 26? It’s been said that people become more conservative with age. Perhaps that age is now 26.

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