MoneyMix Contributor
The idea of providing some health coverage for all citizens has been around for decades, but it took until March 2010 for U.S. legislators to pass health-care reform and for it to be signed into law. The landmark Affordable Care Act, signed by President Barack Obama, will provide health-care coverage to an estimated 30 million people who currently lack it. It's pretty much guaranteed that Obama will have a place in history as the American president responsible for revamping the nation's health-care system.
Young adults are some of the Americans who could benefit the most from health-care reform. They also could bear the burden of it.
why should young adults care about reform?
Americans between the ages of 19 and 29 have the highest uninsured rate of any age group. Thirty percent do not have health insurance, compared with 17% of the general adult population. That's because many young people have entry-level, low-wage, or temporary jobs that often don't offer health coverage. Nearly half of employed young adults only work part time, which usually does not provide health insurance, or they work at small companies that do not offer coverage.
Young adults often think they're healthy and do not need health care. But, studies show that one of six young adults has a chronic condition such as high blood pressure, asthma, diabetes, or cancer; one-quarter of young adults are obese; and one of six young adults ends up in the emergency room because of an injury.
In a recent survey, more than one-third of all young adults—with or without health insurance—reported problems with paying medical bills. One of four reported debt because of medical expenses.
Patrick Bradley, Newark, Del., was one of them. When he was 20, he worked full time at a restaurant that did not offer health insurance. "Even if they did, I wouldn't have taken it because it would have cost too much and I never went to the doctor," he says.
That year, he ended up having an operation that cost $4,000 out of pocket. "I paid $10 per month to the hospital for almost 10 years, then finally paid it off when I inherited some money," he says.
When asked if he would have done things differently, Patrick, now 36, says no. "I wouldn't have spent the money to pay for insurance out of my paycheck. It wasn't worth it. The coverage I would have gotten probably wouldn't have paid for my operation."
what's wrong with the current health-care system?
According to the World Health Organization, the U.S. has the highest health-care costs in the world.
Many Americans don't have access to affordable medical insurance. For those who have access, there are lots of ways insurance companies can deny or stop coverage.
Many people say we are behind the times—especially when you compare the U.S. with Europe, where most countries have either publicly sponsored and regulated universal health care or publicly provided universal health care.
Under the old U.S. health-care system, insurance companies could deny coverage if a person had a pre-existing condition, drop coverage for customers who became seriously ill, or charge more based on demographics. Right now, in 33 states, insurance companies are permitted to charge higher premiums based on age, gender, and health status without any restrictions. A young woman in her 20s could be charged one and one-half times more than a man the same age because she is in her reproductive years.
Health-insurance premiums nearly doubled in the past decade and are expected to double again over the next eight years. In 2010, the average annual premium for those with individual coverage cost approximately $3,606, according to a Kaiser Family Foundation survey.
Two-thirds of young adults who had a gap in coverage often neglected to see specialists, get necessary medication, or go to routine checkups or mental health appointments. If an uninsured person incurred serious health expenses, he or she most likely would not be able to pay. The cost would then fall on the insured population in the form of higher premiums.
Learn more about health-care reform. Find more information on health-care reform and young adults. Stay up-to-date on health-care reform news.
When Jennifer Wysocki, Pike Creek, Del., was between jobs after college, she didn't have insurance and wouldn't go to the doctor when she was sick. "I got my birth control at Planned Parenthood, and didn't take any allergy medication that I needed," she says. "One time, I waited so long to go to the doctor that I got so sick I had to go to the emergency room. It was terrible. It took me three years to pay off that one visit."
what does the new health-care bill include?
Here's a summary of what's included in the Affordable Care Act, with a focus on what changes will mean to young adults like you and when changes take effect:
June 23, 2010
- Insurance companies cannot deny individuals coverage based on pre-existing conditions. The law also will stop insurance companies from charging people more if they are sick and limit the amount an insurance company can increase an individual's premium simply due to age.
Sept. 23, 2010
- Effective for plan or policy years beginning on or after Sept. 23, 2010, young adults will be able to stay on their parents' health-care plan until age 26 if they don't have access to other employer-sponsored health coverage. For insurance plans that operate on a calendar year basis, the requirement doesn't take effect until Jan. 1, 2011, but some large insurers have extended coverage ahead of the deadline and began implementing this practice early.
- Insurance companies can't place lifetime limits on how much they'll cover if you get sick. The law also will ban insurance companies from dropping people from coverage when they get sick.
- The Act restricts the use of annual limits in all new plans and existing employer plans this year, until 2014 when all annual limits for these plans are prohibited.
- Plans must cover prevention and wellness benefits at no charge by exempting these benefits from deductibles and other cost-sharing requirements. There also will be a huge push in preventive medicine and education throughout the country.
2011
- Participants in health-care flexible-spending accounts, health-reimbursement accounts, and health-savings account will only be reimbursed for their over-the-counter medicine expenses if they have a prescription for the medicine.
2012
- The reform will ensure that standardized, easy-to-understand information about plan options will be available so young adults and all consumers can compare prices, benefits, and performance of health plans to decide which option is right for them.
2013
- There will be an annual cap of $2,500 on pre-tax health care flex-spending account elections.
2014
- State-based health insurance exchanges will be created so small employers and individuals have a variety of options to decide how much health-care coverage they want. The exchanges will provide security so if you change jobs, go part time, or move, you still will have access to plans.
- Children up to age 26 can stay on a parent's employer plan even if they can get coverage through their own employer.
- Most Americans will be required to have health insurance. By 2014, if you make up to $43,000 a year, you'll receive tax credits to ensure that you can afford quality coverage in the new state-based health insurance exchanges. Someone who still cannot afford coverage will qualify for a hardship waiver.
- Going forward, plans in the new exchanges and all new plans will have a cap on what insurance companies can require you to pay in out-of-pocket expenses, such as co-pays and deductibles. The new law also bans "gender rating" that allows insurance companies to charge women more than men for the same coverage.
- Before the exchanges are up and running, uninsured young adults with pre-existing conditions will have access to affordable insurance through a temporary subsidized high-risk pool, which will help protect them from medical bankruptcy.
By 2019
- The law is expected to extend health insurance coverage to approximately 32 million Americans who are currently uninsured, making insurance available to an estimated 95% of nonelderly individuals.
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