Are Young People Better Off Being Uninsured?

The Affordable Care Act makes health insurance more expensive for young adults while simultaneously making it far less risky to go without insurance according to a study by Conor Ryan, a health care analyst, and Chris Holt, the director of health care policy, at the American Action Forum. They find that opting out of coverage and paying their own costs out-of-pocket would be the most financially advantageous decision for most young adults.

  • In 2Uninsured1014, 86 percent of young people would be better off opting out. As the penalty rises, that number will drop, down to 66 percent in 2019.
  • By reducing the sample down to only those households who had medical expenditures in 2011, the study determined that 72 percent of those young adult households would be better off opting out of health coverage, with that number dropping to 59 percent in 2019.
  • In a third scenario, which accounted for the inherent value of health insurance, 63 percent of young adults would see a financial advantage from opting out of health insurance, that number dropping to 41 percent in 2019.By reducing the risks of forgoing insurance while at the same time increasing the cost of health coverage, the Affordable Care Act incentivizes young adults to cover their own health expenses and opt out of insurance.

Comments (20)

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  1. Thomas says:

    This is what happens when the policy is to put more of the financial burden on young people, who are healthier and more likely to be risk takers.

    • Matthew says:

      Most young people will only go to the doctor if they are feeling sick. Other than that they have no incentives to seek medical care. Because of this, why have insurance when its cheaper to pay the penalty and pay out of pocket.

    • Andrew says:

      I doubt the policy makers for ObamaCare expected people to pay a penalty to be without insurance.

    • Walter Q. says:

      It is no mystery that young people will value the money that would be used for insurance higher than the actual insurance. When they are willing to take on that risk, its more financially advantageous to forgo the insurance and keep the money that would have been spent on insurance they deem unnecessary.

      • Perry says:

        Not only that, most don’t have extensive assets to be lost if they couln’t pay for a catastrophic illness.

  2. James M. says:

    More reason why this has all of the characteristics of a looming death spiral.

    • Kyle E says:

      Is not only looming right now, it seems its beginning to be imminent if something is not done soon. Let’s hope that we don’t look back to this time, when we are suffering from a preventable issue, and regret not doing something.

  3. Xavier R says:

    What would happen to the program if the young people opt-out? This would provide a hard blow to the insurance companies who would be stuck with sick older patients that have a higher probability of needing coverage. If enough young individuals quit, the market won’t be sustainable. The results of the study confirms what many said before, that Obamacare was taxing the younger generations in order to help the older. Eventually, even opting out, the young will have to pay through taxes the bail out of the insurance companies if they were to fail.

  4. Raul P says:

    There are no incentives for young individuals to get insurance. In fact there are incentives not to get one. How can insurance work if only those who enroll are the ones who are sick? We are going to end up with a worse health care system than the one we started with.

    • Trent says:

      but their commercials are just so good!

      • BHS says:

        Hah. Yes, this study will have to be revised after the singing dog and cat commercial from Enroll America. Young people are going to flock to in droves!

  5. Edwin V says:

    “A stubborn reform, the story about a predictable catastrophe” in a few years we will read a headline similar to this one.
    It will narrate a story about a stubborn President and his party that wanted to reform the healthcare at all cost. Led by their desire of leaving a legacy, they embarked in a voyage that would end in disaster. It is a pity; these individuals were deaf to warnings of other politicians, economist, and the people who warned them about the imminent catastrophe. Blinded by an utopic ideal, they changed the status quo. They sought equality, thus they began reforming the system but instead of a better society, they left the majority of Americans worse off.

  6. Jimbino says:

    This report ignores the fact that Obamacare favors the sick, old, hypochondriac, married and breeding woman and greatly disfavors the healthy, young, prudent, single and childfree male.

    The young male gets royally screwed, even compared with the young female, since females use 87% more health care than the male and popping out one kids costs over $10,000.

    Young men, you need to learn to pull out, the sooner the better!

  7. Barry Carol says:

    If you spend money for health insurance and don’t use it / need it, that’s money that can’t be used for something else, presumably more enjoyable. If you don’t spend the money for insurance and then need it because you had a serious accident or received a cancer diagnosis, the consequences of not having health insurance will probably be quite severe, both financially and perhaps medically. Even if you have few assets and would be willing to just declare bankruptcy to escape the medical bills, you may not be able to access all of the healthcare you want or need. Moreover, bankruptcy also brings a ruined credit rating. So, my suggestion is to be sure to at least understand and evaluate the consequences of being wrong before you decide to remain uninsured.

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