June 19, 2012 | Commentary on Health Care
In anticipation of the Supreme Court's Obamacare decision, it is important to remember that the constitutionality of the law's individual mandate isn't the only concern. For example, Obamacare will negatively impact many younger Americans. Here's a list of five ways young adults will be hurt by the law:
•Premium increases. Obamacare imposes age-rating rules that increase premiums for young adults. The law allows premium costs to vary by a ratio of 3 to 1 based on age. But as Heritage research shows, "The natural variation by age in medical costs is about 5 to 1 – meaning that the oldest group of (non-Medicare) adults normally consumes about five times as much medical care as the youngest group." This means that under Obamacare, young adults will pay artificially high premiums, and older adults will pay artificially low premiums. Actuaries estimate that "the effect will be to increase premiums for those ages 18–24 by 45 percent and those ages 25–29 by 35 percent while decreasing premiums for those ages 55–59 by 12 percent and those ages 60–64 by 13 percent."
•Loss of coverage. Obamacare puts in place new rules that prohibit plans with annual limits. While limited health plans may not be a long-term solution, some coverage is still better than none. Several colleges across the country have already stopped offering low-cost plans to students because of the new regulations. For example, for the 2012–2013 academic year, one college offered a plan that cost students $445 a year with an annual limit of $10,000. But Obamacare requires a minimum cap of $100,000 this year, which would increase student premiums to more than $2,000 for the new level of coverage, thus making coverage through the school an unaffordable option. For the 2013-2014 school year, the minimum cap is set at $500,000, and after that, no payout cap is allowed. This will likely lead more colleges to drop coverage, since, as a Government Accountability Office study states, "Nearly all (96 percent) of the 194 student insurance plans we reviewed established a maximum benefit amount."
•Government takeover of student loans. A provision neatly tucked into the massive health care law is an effective nationalization of the student loan industry. Obamacare ends government subsidies to private lenders and puts the federal government in charge of originating and servicing federally backed student loans. As almost anyone is eligible for a student loan, Heritage's Lindsey Burke explains that "these policies only exacerbate the college cost crisis, continuing a vicious cycle whereby college costs rise in tandem with ever-increasing federal subsidies.... Colleges will once again be able to increase costs, and students with easy access to low-interest loans will once again be able to pay."
•Less money for education. Obamacare's massive expansion of Medicaid, which will add almost 20 million more Americans to the program, will be difficult to sustain on already strained state budgets. As states are forced to redirect a growing portion of their budgets to Medicaid, less funding will be available for other state priorities, such as education. The Medicaid expansion will increase state spending by an additional $64 billion through 2020, and it only gets worse as federal contributions gradually decline.
•Crushing fiscal burden. Younger generations will be left footing the bill for Obamacare and its irresponsible spending. Despite his many lofty promises, President Obama's law does not reduce health insurance premiums, spending, or the deficit. The latest cost estimate for Obamacare's insurance provisions is $1.5 trillion over the next 10 years, which still doesn't include a full decade of spending, since the most expensive provisions don't begin until 2014. As the national debt approaches $16 trillion and the cost of Obamacare continues to rise, younger Americans will be saddled with crushing taxes to pay for it.
Obamacare's negative impact on young Americans is just one of many reasons the law should be repealed.
Alyene Senger is a research assistant for Health Policy Studies at The Heritage Foundation.
This article first appeared on OCRegister.com.