The 'Young Invincibles': A Huge Hurdle For Obamacare
FARAI CHIDEYA, HOST:
Now it's time for our regular segment Words You'll Hear, where we try to understand what's happening in the news by parsing some of the words associated with it. This week, our words are young invincibles. We're talking about healthy young people who don't have health insurance. They're not being covered at work, and they're choosing to bypass health care coverage available through the Affordable Care Act. They could be the downfall of the long-term success of President Obama's legacy expanded health care coverage.
Joining us to help explain more about them is Julie Rovner from Kaiser Health News. Hi, Julie.
JULIE ROVNER: Hi. How are you?
CHIDEYA: I'm great. So first of all what are the characteristics of young invincibles? How young are we talking about and what's keeping them from buying health insurance?
ROVNER: Well, originally young invincibles were males in their 20s. That was how they were always thought of, you know - young guys who felt like they were invincible, so they didn't need health insurance. They would never get sick. They would never have an accident. More recently, the term has come to describe, I think, what most of us think of as millennials, both young men and young women. But the idea is still the same. They feel like they don't need health insurance because they're not going to get sick.
CHIDEYA: So why is it a problem for insurers and especially for the Affordable Care Act if these folks don't buy insurance?
ROVNER: Well, the Affordable Care Act made individual insurance available to people who were older and sicker, and they jumped at the chance to buy it. The hope was that younger people would buy it because they were required to and their lower expenses would help balance out the risk pool, helping them basically subsidize older, sicker people on the theory that someday they'll become older, sicker people and young people will subsidize them.
CHIDEYA: Last week, Aetna at first said that they would be pulling back on coverage in the Affordable Care Act exchanges, saying they were losing money in large part due to these young invincibles, but then another story emerged. So can you walk us through Aetna's move?
ROVNER: They're pulling out of most of the places where they are - have been selling insurance. And, you know, they said it was due to losses, and I don't think anybody doubts they have been losing money. But what came out shortly after that announcement was a letter from Aetna to the Justice Department saying that if the Justice Department didn't approve Aetna's merger with Humana, they would therefore have to start pulling out, which is exactly what they did.
So some people saw that as kind of a threat that, you know, if you don't do what we want, then we're not going to participate anymore, but others point out that, you know, Aetna has an obligation to its shareholders. And even though it makes lots and lots and lots of money in general, it was, in fact, losing money in the exchange markets. Pretty much every insurer is complaining that this has not worked exactly as they had wanted, and it's not just the lack of young people. There are unhealthy young people, and there are healthy older people. But basically they don't have the mix that they had hoped for.
CHIDEYA: So what can policymakers and/or insurers do to convince the young invincibles to actually buy into the coverage?
ROVNER: Well, one problem that a lot of insurers have talked about - it's been too easy to buy insurance outside the open enrollment period, which means that you can wait until you get sick to buy insurance. And that's been a problem.
This year is the first year that the penalty actually goes up to its full amount for not having insurance. So now depending on how much they earn, young people could be responsible for fines that go up to about $2,500. So that could convince some of them that maybe they would like to spend that money on insurance instead. And then, of course, depending on who's elected president and who's elected to control Congress next year, there could be some more changes to try to smooth out some of the bumps that have been seen in the implementation of the law.
CHIDEYA: Julie Rovner covers health policy issues for Kaiser Health News. Thanks for joining us, Julie.
ROVNER: Thank you.
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