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  • Decrease in Young Uninsured: Does Obamacare Deserve Credit?

    Yesterday, the Administration released data from the 2011 National Health Interview Survey that shows, among other things, that the number of uninsured young adults declined over the last year. In a short press release, the Department of Health and Human Services (HHS) touted this as evidence that Obamacare is working, specifically attributing increased coverage of young adults age 19–25 to the Obamacare provision allowing those individuals to stay on their parents’ health plans.

    Undoubtedly, it’s true that some of those individuals did get coverage due to that provision, but HHS claiming credit for Obamacare for all of the increase appears to be an example of the classic statistical fallacy of confusing correlation with causation. Even more importantly, over the long term, the net effect of Obamacare’s many provisions will be to increase the already unaffordable cost of health care, which is one of the main reasons young adults and other uninsured forego coverage.

    The Administration claims that the percentage of uninsured adults age 19–25 declined from 36 percent before passage of Obamacare to 27 percent in the second quarter of 2011, a decrease of 2.5 million individuals. In fact, the report they reference shows that uninsurance in that age group actually dropped from 33.9 percent in 2010 to 28.8 percent in the first six months of 2011, a decrease of 1.3 million.

    Moreover, the data also show the same coverage trends for older, working adults. Between 2009 and 2010, the number of uninsured grew, but then, between 2010 and 2011, it fell. It thus seems likely that at least some portion of this variation in coverage was due to the U.S. entering, and now beginning to exit, a recession. As individuals lose jobs in a recession, many lose their health coverage, and as an economic recovery occurs, the opposite occurs.

    Regardless of whether or to what extent the White House is correct, allowing young adults to stay on their parents’ plan does little more than cover up a fundamental problem left unresolved under Obamacare. It’s clear that the reason for uninsurance for many Americans, not just young adults, is not lack of access. Instead, it’s the increasingly unaffordable cost of coverage. Obamacare will not only fail to slow runaway health care costs but will instead cause premiums to skyrocket as the rest of its provisions go into effect between now and 2014.

    Already, parts of the law, including the requirement that young adults up to age 26 can stay on their parent’s plan, are increasing premiums. Projections from Deloitte, a benefits consulting firm, show increases of 1–2 percent from this provision alone.

    And that’s just the beginning. As the rest of the law is implemented, small jumps in cost will quickly add up to a sizable chunk of change. Heritage analysts have identified at least 12 provisions of Obamacare that will increase premiums. Beginning in 2014, insurance plans will be required to offer a government-approved minimum level of coverage. As Heritage expert Ed Haislmaier explains, “The more benefits providers are able to have deemed ‘essential,’ the more insurers, employers, and patients will have to pay for these services. The result will be higher premiums for tens of millions of Americans.”

    Other insurance requirements—such as no cost-sharing for preventive services, limits on other cost-sharing and deductibles, elimination of annual and lifetime limits, and guarantee issue—will further ratchet up costs. And then there’s the impact of new taxes on insurers, medical device manufacturers, and pharmaceutical companies, the cost of which will be passed on to consumers.

    Even if young adults do stay on their parents’ plans, they don’t face a pretty scene once they become too old to do so. Several independent studies have shown that the biggest increases in premiums will fall on the young and healthy purchasing insurance in the individual market. MIT economist Jonathan Gruber and Gorman Actuarial show that, in the state of Wisconsin, those age 19–29 who purchase insurance in the individual market will see an average increase in their overall premium of 34 percent.

    So Obamacare will not eliminate one of the main barriers that young adults and other Americans face to obtaining coverage. Instead, it will make matters even worse.

    Posted in Featured, Obamacare [slideshow_deploy]

    9 Responses to Decrease in Young Uninsured: Does Obamacare Deserve Credit?

    1. Stirling says:

      It's clear that most parrents are looking at Obamacare as a government grab, and are just taking steps to hold onto control for as long as possible before the government grabs the last bit of freedom from our healthcare system. I'm a parrent myself and have seen the "Government Creep" in every aspect of our lives, which has made me take steps to protect my family. Government has never been the answer to anything, and I pray for those who are leaving their lives in the hands of the government to survive (given the current debt situation our country has and will have in the future).

    2. steve h says:

      It's pretty obvious Obamacare deserves credit for the large drop in the young uninsured. They are least likley to need it, but will be very happy they have it, should they ever need it.

      I don't quite undertsand how you think Obamacare will increase premiums. Premiums were already shooting up uncontrollably, they've grown 150% over the last decade…and everythign i've seen shows premium increases are slowing and expect to be slowed by obamacare.

      This is an issue republicans refused to address when in power and i'm glad someone stepped up and took on this controversial issue, full well knowing the american people will be fed a lot fo misinformation and lot of elected officals will lose their seats for supporting it. I commend those brave Members who stood up and voted for what they know is correct.

      • Mike, Wichita Falls says:

        Premiums were skyrocketing because insurers were continually forced by federal and state governments to cover more services and due to the increased usage by all of those unhealthy, obese people continually cited by the First Lady. Obamacare only doubles down on those mandates. Insurers can choose between folding or passing those costs onto the insured. Obama is on record as desiring a single payer system where we subjects would be begging for health care and having to justify our existence and productivity to get it.

    3. Bobbie says:

      no Obama doesn't get any credit. Obama promoted health care. Insurance came when Obama saw the dollar signs. what purpose is "insurance for all" besides a false sense of security? If everyone gets health care for free what's the sense of the paperwork? Insurance isn't health care at all and the costs of our recently adult child makes it an unsustainable cost on us! Let the kids grow up, Mr. Obama! In America with proper education, minds are developed to know personal responsibilities at age 18. What kids are you sympathetic to that you don't think they should be considered adult until 26? Government failed education? Government Insurance just adds to the government corruption of the government disguised health care plan.

    4. Jeanne Stotler says:

      This is not without consequences, most people I know, including those on Medicare, have had hefty increases in premiums, I pay over $200 a month just for supplemental Insurance plus another $100 for Part B then there is Part D on top of this. there is a solution, stop frivolous law suits, stop the fraud in Medicaid and Medicare. Doctors are paying high Mal-Practice premiums, those who spec. in OB-Gyn and orthopaedic are among the highest.

      • Brad Kelley says:

        Jean, you're right. The Kaiser Foundation, possibly the largest insurer next to Medicare says Insurance premiums will likely increase under O'Bamacare and insurance company profits will decrease. One thing O'Bamacare does with its unlawful mandate is stop people gaming the system. Here's how it works:

        "For one, as the individual mandate in Massachusetts has shown, people game the system. They’ll go on insurance just prior to major health care expenditures which insurers are legally bound to cover and then as soon as those procedures have been covered they’ll cancel their coverage. As the Wall Street Journal reported back in July of 2009, Charles Baker, the former Massachusetts gubernatorial candidate and CEO of Harvard Pilgrim stated that Harvard Pilgrim had seen an “astonishing” uptick in people buying coverage for a few months at a time, running up high medical bills, and then dumping the policy after treatment was completed and paid for. Harvard-Pilgrim estimated that between April 2008 and March 2009 about 40% of its new enrollees stayed with it for fewer than five months and on average incurred about $2,400 per person in monthly medical expenses. That’s about 600% higher than Harvard-Pilgrim would have otherwise expected." (Wall St. Cheat Sheet, March 28, 2011.)

    5. IGotAComment says:

      If Congress and the Prez really wanted to simplify insurance, they'd just mandate the same insurance they had and have a sliding scale for the lower income.

      Of course, this ain't gonna happen.

      Why aren't there community health centers specifically for Diabetes and Hypertension? Go in every month and get checked out by specially trained nurses and paramedics and then go see your doctor every 6 months. That constant availability of a health care provider at low or no cost may well improve the overall health of people with thee two conditions.

    6. Robert White says:

      Hmm. Just by the fact that the author keeps referring to PPCA (Health Care Reform) as Obamacare is an indication to me that he/she cannot be objective. And as far as health care not being affordable, one cannot blame Obama for this, but the congress and senate. Remember the public option? Any how, one cannot argue the correlation between the drop and the enactment of the bill. Even with jobs returning, those jobs do not necessarily come with benefits. They are not the "good jobs" that have been lost.

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