We all know it. Health care reform was a BFD. Because of the passage of the Patient Protection and Affordable Care Act (PPACA), 32 million of the currently uninsured in America will get covered. By the way, over 15 million of those are uninsured young Americans.
But what does reform mean for young Americans? Here are the most important points:
Expands Affordable Coverage to Millions of Young Adults:
The new law will provide coverage to millions of uninsured and underinsured young adults.
- First, the law expands Medicaid, a very low-cost government insurance program, to cover people making under $14,400 a year. Almost 8 million uninsured young adults could benefit from this affordable insurance option.
- Second, the law creates tax credits for those purchasing insurance who earn under $43,000 a year. Roughly three-quarters of young people ages 19-29 fall in this category and relatively few have employer-sponsored coverage. The tax credits will limit the amount an individual pays in insurance premiums for a plan purchased on a state exchange. For example a young person who wants to buy a plan on the individual market (ie not through an employer) and is making $21,660 will have to pay no more than 6.3% of his or her income (or $1,365 yearly in premiums). The tax credits will cover any premium costs beyond that. These benefits starts in 2014 and will assist even the currently insured by making coverage more affordable.
- Third, the law will allow adult children to stay on their parents’ health plan to age 26. The Office of Management and Budget estimates that as many as 1.2 million previously uninsured young people could gain coverage through this plan. Many more will be able to upgrade their currently inadequate coverage to the improved benefits offered by their parent’s coverage. This provision also adds nothing to state or federal deficits. Go to GettingCovered.org for more information.
Consumer Protection:
The law will help to end the worst abuses of the insurance industry. It prevents insurance companies from:
- Denying people coverage based on a pre-existing condition.
- Raising rates after people get sick.
- Canceling an existing policy to avoid paying claims (“Rescission”).
Make It Easier to Find and Buy Insurance:
Just like you easily compare products and find good deals online, the new law seeks to make insurance easier to compare and buy by creating online exchanges. Each state will have responsibility for creating an exchange where individuals can go to compare plans and purchase the package that works best for them. This new competition should help to reduce prices and improve the quality of insurance plans. Also, an individual market plan gives young adults greater opportunity and freedom because it makes it find the best job without the fear of going uninsured.
Shared Responsibility:
Health reform also seeks to reduce health care costs overall by requiring people to take responsibility for purchasing insurance, a provision that starts in 2014. By encouraging more people to buy in, the individual mandate reduces insurance premiums by spreading risk over a wider population. The provision also makes sense as a matter of personally responsibility; those who don’t purchase insurance end up visiting emergency rooms without the ability to afford care, pushing the cost of their treatment on everyone else.
Why Health Care Reform is Still Important:
The new law will not cover every young adult or ensure that all covered young people receive quality insurance. Up to 4 million young adults will end up with so-called catastrophic plans that offer minimal benefits before enrollees must pay a deductible of nearly $6,000. So there’s more work to do to ensure that every young American and every American has quality affordable health coverage. Rather then increase funding to make tax credits sufficient for everyone to buy coverage, the new law creates an inadequate catastrophic plan for young adults who cannot afford better insurance. The plans provide inadequate primary or preventive care, and participants must pay a $6,000 deductible before receiving any real coverage. Reform will continue to be a priority so long as Americans lack the decent, affordable health insurance they need.
- Find out why reform matters for you
- Find out why you should get covered
- Learn about what’s coming next with health care reform
- In college? Read the latest on college plans
- Take action by joining our Getting Covered campaign
- Ready to Wonk out? View our glossary to learn more