The basic premise behind the Affordable Care Act is to reduce the overall cost of healthcare. The law precludes insurance carriers from denying coverage for preexisting conditions and it also allows younger individuals to remain on their parent’s health insurance plans until they reach the age of 26.
Another condition of the act, however, mandates 18-24 year olds obtain their own health insurance-or pay a $100 fine.
Many suggest, however, that young individuals-particularly those who are healthy-will simply pay the fine and forgo the coverage.
A case in point involves a 24 year old Milwaukee resident. He is in good health, he doesn’t currently have health insurance and isn’t inclined to purchase it. However, under the new law, signing up for coverage would likely cost him a health insurance premium of $3000 a year. (He makes about $48,000-too much money to qualify for government assistance.) But the penalty is only $100. So, he’ll likely pay the $100.
The Congressional Budget Office, or CBO, estimates that roughly 6 million individuals within this age range will simply pay the tax rather than get health insurance.
The new mandate will take effect in 2014. However, the situation may change come 2016 This penalty will rise to $625 or 2.5 percent of an individual’s annual income.
Source: Associated Press, Health insurers fear young adults will pay penalty, opt out of coverage under new law, July 5, 2013Share