Why the Affordable Care Act Is Good for Young Adults

As the debate over the merits of the Affordable Care Act continues, columns like those written by my PolicyMic colleague Jacob Shmukler promulgate a misguided message: that young adults do not need health reform.

The facts tell us otherwise; the Affordable Care Act (ACA) is probably the most helpful piece of legislation for 20-somethings in several decades. There are literally dozens of provisions that bring huge benefits to millions of the Millennial generation. Below are descriptions of just a few.

Dependent Coverage

Under the ACA, insurers offering family coverage must cover a dependent up to the age of 26.  Joining a parent’s plan is the most affordable option to get decent insurance. Any claims to the contrary are clearly rebutted by the provision’s extreme popularity; over 600,000 young people joined their parent’s plan in the first quarter of this year.

Shmukler claims that those under their parents' plans will increase insurance costs because they get sick more often. But covering another dependent on a family plan is actually expected to cost very little. Estimates state that the average family’s premiums will only increase from 0.7% to 1% a year from adding dependents to a family plan. Try getting an individual policy (already far less comprehensive) for that little, even if you are "young and healthy," as Shmukler says.

Ban on Pre-Existing Condition Discrimination

Under the ACA, no American will be denied coverage, charged a higher premium, or sold a policy that excludes coverage of essential health benefits simply because he or she has a pre-existing condition like asthma, diabetes, or cancer. Right now, insurers cannot discriminate against children based on pre-existing conditions, which means that young, generally lower-income parents with sick children are no longer left in a desperate situation. 

But almost 16% of young adults ages 18 to 24 also have pre-existing conditions, and without the ACA, are often excluded from the current market altogether. In 2014, those young adults will be able to enroll in an insurance policy without discrimination. Moreover, because every American will be covered, a larger pool of insured people will spread risk over more individuals and keep insurance costs low.

Medicaid Expansion for Low-income Young Adults

In most states, Medicaid is only available for low-income adults with children. At the same time, youth unemployment is nearly double the national average; this makes insurance access through a job especially limited. As a result, single, young adults who are struggling to afford insurance do not have many comprehensive coverage options if their parents cannot cover them. All of this will change in 2014.

The ACA will cover almost 8 million uninsured young Americans by expanding Medicaid to those earning up to 133% of the federal poverty level. In other words, the ACA gives literally millions of young people an option for care, when no other option was previously available.

Premium Help to Buy Insurance

Starting in 2014, low to middle income adults who do not qualify for Medicaid will be eligible to receive tax credits for health insurance. In other words, the two-thirds of young adults who earn less than $44,000 — or more if they have families — will be able to purchase a policy that is more affordable. Moreover, because all Americans will be purchasing insurance, the risk pool will grow, competition will increase, and premiums will fall.

More young adults will have access to more comprehensive, and less expensive, care due to the ACA. The act will not only improve their health, but also their finances. If that is not a good deal for young adults, I don't know what is.

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