To keep costs lower for everyone, new exchanges will try to attract large numbers of healthy people, especially the young.
Paul Beach may not feel the weight of it, but he’s a linchpin in making the federal health care overhaul work.
He’s 28, fully employed and uninsured.
“I want insurance,” he said. “But it’s a tossup between eating food or buying health insurance. I’d need a second job just to pay the insurance.”
As Minnesota and other states get ready to launch new insurance exchanges on Oct. 1, one of the big challenges is persuading people like Beach to buy coverage. Minnesota’s MNsure exchange is firing up an all-out marketing blitz, with young adults one of the key audiences.
To keep costs low for everyone, insurers will have to get as many people paying for coverage as possible. The idea is to spread the cost of caring for older and sicker patients across large numbers of people with relatively few health care needs.
“When you look at the ads and what’s on billboards, they’re trying hard to play to that demographic to get them engaged,” said Steve Parente, a health finance professor at the University of Minnesota. “It might work.”
An abundance of research indicates that young people value health insurance, despite their reputation as “invincibles” who don’t worry a lot about medical coverage.
A recent study from the Commonwealth Fund found that when offered coverage through work, 67 percent of 19- to 29-year-olds opt for coverage. Of those who declined, more than half got insurance through a family member. Just 5 percent turned it down because they didn’t think they would need medical care.
Instead, pocketbook economics remain the chief reason young people roll the dice and go without coverage.
“It’s really an affordability issue,” said Jen Mishory, deputy director and founding member of Young Invincibles, a Washington, D.C., policy advocacy group. “A lot of young people work part time or at jobs that don’t pay benefits.”
That has been true for Beach, of Minneapolis. He has worked at Dunn Bros. for 11 years, the past six as a coffee roaster. “I love my trade,” he said, but the company doesn’t currently offer insurance benefits.
Beach purchased insurance in the past, but dropped it because he couldn’t afford the $190 a month premium. It’s particularly alarming, he said, because his mother went without insurance and put off going to the doctor until getting a late-stage cancer diagnosis. She died last year.
“I haven’t had a physical or been to a doctor in 10 years,” Beach said. “I have no idea what’s going on in my body. Everyone I know says they’d rather wrap up a broken arm with Popsicle sticks than go to the emergency room and face financial ruin.”
Minnesota’s just-released premium prices offer some of the lowest rates in the nation for young adults, with costs in the Twin Cities starting at $90 a month. But the true trade-offs won’t be evident until the MNsure website launches for open enrollment on Oct. 1, when officials say it will be easy to comparison shop among different options.
Lower monthly insurance bills will inevitably come with higher out-of-pocket expenses and fewer choices in where to go for medical care.
But a majority of adults in their 20s will qualify for government subsidies available on the exchanges, according to the Urban Institute, which could take out some or all of the bite.
In Minnesota, individuals earning up to $15,282 qualify for Medicaid and won’t have to pay a premium at all. Those with income up to $22,980 will kick in a modest portion of the premium for coverage from the state’s MinnesotaCare program. Individuals making up to $45,960 will qualify for varying levels of tax credits, which are claimed at the time of enrollment.