Healthcare Prescription: Young key to success of new healthcare law
Sep 23, 2013 4:48 PM CDT
LA CROSSE, Wisconsin (WXOW) -- Adam Kast, a 30-year old student at Western Technical College, learned about the importance of health insurance the hard way.
"I've had some medical things without insurance in the past," Kast said. "You get the medical bills and your jaw drops."
Kast was uninsured as of two weeks ago. He and his wife recently obtained coverage through her employer.
But Kast said, before she was hired, the couple did not think it was possible to buy insurance on their own.
"It just wasn't something we could afford," he said.
When the President signed the Patient Protection and Affordable Care Act into law in March, 2010, the new policy was supposed to help those who find themselves uninsured -- like Adam did.
Steve Kunes, the Executive Director of Mayo Clinic Health System's Health Tradition Health Plan, said he's positive there are many young adults who either can't afford insurance or don't think it's worth buying.
"It's hard to calculate who the uninsured's are," Kunes said. "We can't really track them because they probably haven't used any medical care."
"So how many are out there? Probably quite a few," he said.
The White House puts the number of uninsured, 19 to 29-year old Americans at approximately 16-million.
Starting October 1, those both young and old who don't have health insurance will be able to shop for coverage online through government run, healthcare exchanges.
Greg Skemp, the Director of Sales and Marketing for Gundersen Health System's Gundersen Health Plan, said convincing young adults to buy in is very important.
"If we don't get everybody into the pool, there's a good chance this thing won't work," Skemp said.
"We know the people who need insurance are going to buy it," he said. "Because they have healthcare needs. We know what their costs are going to be and they'll be pretty high."
"So we need a lot of folks who may not have a lot of healthcare needs now to contribute to the insurance side of it so we can offset the increasing costs," Skemp said.
The law requires insurance companies to cover high-risk individuals -- including those with pre-existing conditions. But Skemp said in an effort to lower their insurance rates, premiums will almost certainly go up on the young and healthy.
"Today, different ages pay different premiums," he said. "That's just the way the premiums are broken down to the group."
"Right now there's a ratio of five to one. The oldest person in a group, a 64-year old before he or she is eligible for medicare, will not pay more than five times more than the youngest person -- which is a 20-year old," Skemp said. "But the way the law is going to work is it changes the ratio from five to one to three to one."
"The younger folks are going to pay a little bit more and the folks at the top of the age demographic are going to pay a little bit less," Skemp said.
In an effort to persuade everyone to buy coverage, the Affordable Care Act penalizes the uninsured.
Next year, those failing to buy coverage will be hit with a fine of $95 dollars or one percent of total income -- whichever is higher.
The fines then increase to more than $300 in 2015 and more than $600 in 2016. In addition to being forced to pay the penalty, the uninsured also run the risk of getting slapped with a huge medical bill.
"You don't have insurance, you're just paying the penalty," Skemp said. "So if you go to the hospital you're still going to have to pay the bill that they send you."
The exact rates of insurance plans available through the exchanges won't be known until everything goes live October 1.
But young adults, like all who choose to buy health coverage, could be eligible for government subsidies based on their income.
Individuals with incomes between $11,500 and approximately $46,000 per year will qualify for federal money to help with the cost of health insurance if they purchase at least a "silver" level plan.
Skemp said the subsidies vary based on where on the income scale recipients fall, with the goal being to limit the cost of insurance to certain percentages of total income.
The income cutoffs increase for families of two or more.
Kunes said the government exchanges are not just meant for the uninsured. He said both those covered through work who might be searching for more affordable plans, as well as those under 26-years old who under the Affordable Care Act are allowed to remain covered by their parents' insurance plans, should at least give the exchanges a look.
"It might not make sense for them to stay on their parents' plan," said Kunes, adding the plans available online could be cheaper.
Kast said he plans to. His wife pays roughly $175 a month to keep the two of them covered.
"For all I know it could be something that's more affordable for me," he said.
The exchanges will go live here for those who live in Wisconsin and Iowa, and here for those who live in Minnesota.
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