What bros need to know about Obamacare

June 5, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.


Don't raise my premiums, bro. (Mark Gail/The Washington Post)

Over at New York Magazine, Jonathan Chait notices a pattern in the most recent round of Obamacare critics: Many focus on the plight of the middle-income 25-year-old male. The crucial bro demographic, if you will.

This vein of coverage actually stretches back a few months, perhaps starting with a Ben Smith piece in BuzzFeed in February, which was all about the impending "rate shock" that young people would experience under Obamacare.

The basic argument goes like this: Right now, young and healthy people can get a great deal on health insurance. Under Obamacare, where a bunch of older and sicker people are likely to enter the individual market, their premiums will likely increase.

What's more, these are the people that you really need to buy insurance under Obamacare: They tend to use less health care than people their parents' age, which makes them a huge boon to the insurance marketplace.

Now that it's coming up again, it's worth spending a bit of time understanding this demographic, why they matter and what their premiums will look like under the Affordable Care Act. In other words, here's what bros should know about Obamacare.

Sorry, bro: Young adults currently have the highest uninsured rates.


The bros in the back of this picture have a much higher chance of being insured than the dudes in the front (Tracy Woodward/The Washington Post)

"Young adults are the age group least likely to have health insurance," the Census found in data released earlier this year. In 2011, 27.2 percent of Americans between 18 and 34 lacked insurance coverage.

The young adults least likely to have health insurance are -- no surprise here -- those with the lowest income. Gallup looked at the issue in 2010 and found that 86 percent of young adults who earn more than $42,000 (the upper-third income group for 18-to-29-year-olds) had health insurance coverage. Among those earning less than $24,000, the lowest-income group studied, health insurance coverage falls to 58 percent.

Not a clown question: What happens to bros' premiums under the health law?


Obamacare could be a home run or a strike out, choose whichever sports metaphor you like (Kevin Cox/Getty)

Subsidies are key to understanding this question, so let's step back a moment and walk through them. The health-care law includes subsidies for Americans who earn less than 400 percent of the poverty line ($45,960 for an individual). The subsidies are more generous as you move further down the income ladder. Someone who earns $15,360, for example, will receive subsidies to ensure he spends no more than $306 annually on insurance premiums (or $25.50 per month).

Young Americans tend to have lower incomes than their older counterparts. That means they're more likely to qualify for subsidies than their parents. In a new analysis released Wednesday, consulting firm Avalere Health estimates that "approximately two-thirds of young adults (30 and under) who are currently uninsured or enrolled in non-group coverage and who will not qualify for Medicaid—the population most likely to experience rate shock— have incomes between 133 and 400 percent of the federal poverty line (FPL), making them eligible for premium tax credits."

To translate that out of health wonk speak: The federal government will help most young, uninsured people buy coverage under Obamacare. But, there's also a significant contingent who won't receive help–and those are the ones most likely to see their rates increase.

California's recent report on premiums under Obamacare illustrated this especially well, using the example of a 21-year-old purchasing insurance. The black numbers represent how much the individual is expected to pay, and the green numbers show the amount covered by the federal government.


There's a world of difference between the most affordable plan for someone earning $17,235 (150 percent of the poverty line) and someone earning more than $34,470 (300 percent of the poverty line).

For the person who makes $17,235, purchasing a health plan under Obamacare will cost less than the cheapest plans available in California right now. For an individual earning $34,470, it will be more expensive.

The big difference between these two scenarios makes it difficult to talk about young adults in one breath; some will end up paying more and others will end up paying less. The Avalere research suggests that most young people will fall into the former category. Some will undoubtedly see their premiums increase but, with the subsidies, it's tough to generalize that to most young Americans.

Obama administration's take: "I love you bro!"


(DreamWorks Pictures)

The White House will readily acknowledge that young adults are critical to making the health-care law work. At a commencement speech at Morehouse University, President Obama recently urged graduates to "spread the word to your fellow young people" about the health-care law.

Of the 7 million people that the Obama administration expects to enroll in health coverage in 2014, officials think they need 2.7 million to be young adults, in order to prevent premiums from spiking for everyone else. So, it's pretty safe to assume that the White House will be giving the bro demographic a whole lot of attention, trying to encourage their legions across the country to enroll.

KLIFF NOTES: Top health policy reads from around the Web.

Obama is headed to California Friday to tout the Affordable Care Act. "'He’ll highlight the promising news that despite dire predictions, early data on insurance competition and premiums in the state show that ACA -- the Affordable Care Act -- is creating quality affordable choices for Californians who plan to buy insurance this fall,' press secretary Jay Carney said." Donovan Slack in Politico.

Obamacare opponents are outspending supporters on advertising. "Since the law’s passage in March 2010, critics have spent a total of about $400 million on television ads that refer to it, according to a new analysis by the Campaign Media Analysis Group at Kantar Media, which tracks such spending. Supporters have spent less than a quarter of that — about $75 million — on ads that cast the law in a positive light, according to the analysis." Abby Goodnough in The New York Times.

Obamacare has won at least one convert: A legislator who voted against it. "Former Rep. Jason Altmire (D-Pa.) voted against the Democrats’ health reform law in 2010 amid intense pressure to support it. Now that he’s left Congress, he’s the public face of a Florida insurance company that is trying to put the law into place. As a senior vice president at Florida Blue, a Blue Cross Blue Shield health insurer, Altmire travels around Florida explaining how the law will operate and works with business partners on how to implement it." Jennifer Haberkorn in Politico.

CORRECTION: A previous version of this story cited a draft analysis by Avalere Consulting, which stated that 80 percent of young adults 30 and under would be eligible for tax credits. An updated Avalere analysis shows that two-thirds of the age group will qualify for such subsidies.

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