Report on Age
The national health care debate—traditionally focused on an adequate health care safety net for those with high medical needs or low resources, the elderly, sick, disabled, and poor—is turning to healthy and able young adults in the campaign to bring health insurance to every American. Adults aged 18 to 35 often earn lower incomes and have minimal health costs prompting many to forgo health insurance. The Affordable Care Act (ACA) attempts to motivate this population to purchase insurance with a tax penalty for being uninsured and generous subsidies for low-income households. These policies aim to ensure that the new individual insurance marketplaces will have healthy, premium paying members to support higher-cost enrollees. In this report, the Center for Health and Economy (H&E) examines the ten-year outlook of insurance coverage for the young adult population, aged 18 to 35, as well as of middle aged adults between 35 and 65 years old.
Note on the Implementation of the Affordable Care Act:
The predictions detailed in this report are sensitive to the implementation of the Affordable Care Act. H&E does not make projections about the success of the Health Insurance Marketplace rollout and the rate at which members of the individual market will shift into the state-based exchanges. The model currently employed by H&E assumes perfect implementation and full enrollment of eligible, individual market consumers in the state-based exchanges in 2014. Given the complications and obstacles in the first few months of enrollment, this assumption is not likely to be valid until 2015 or later. H&E will revise the projection methods for the Under-65 health insurance market after the first open enrollment period is complete.
Key Findings:
- The uninsured rate among young adults is projected to fall from 21 percent to 14 percent in 2014 and from 21 percent to 12 percent for middle age adults.
- Premium spending for Silver plan enrollees is projected to fall up to 78 percent for young adults and up to 75 percent for middle aged adults in 2014—accounting for subsidies—compared with the premiums for similar plans sold in 2013. The total premium price of Silver plans—without offsetting subsidies—is projected to increase up to 32 percent for young adults and 8 percent of middle aged adults.
- In 2014, H&E estimates that subsidized young adults will receive an average premium and cost-sharing subsidy of $5,740 and subsidized middle aged adults will receive an average of $10,010.
- With a Medical Productivity Index (MPI) of 3.08, medical productivity is highest among young adults in the individual market, followed by an MPI of 2.90 for middle aged adults in the individual market. Productivity is projected to increase by roughly 1 percent for both age groups in the individual market.
- Over the next decade, provider access is expected to decline by 8 percent for middle aged adults and 11 percent for young adults.