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Selective Health Reform Studies Misleading Young Adults

Summary: 
Linda Douglass with the White House Office of Health Reform debunks yet another misleading analysis of health reform's effects on premiums.

For months, independent analysts have consistently debunked health insurance industry-funded studies claiming that health reform would lead to large price increases for people seeking insurance. The core flaw in these so-called studies - exposed again and again - is that they single out one aspect of reform and paint alarmist conclusions while ignoring all other aspects of the legislation that would reduce costs and make health care affordable for families.

Disappointingly, we're now seeing similarly selective approaches to analyzing the impact of health reform from very different sources.  Yesterday, the AP published the results of a so-called analysis of the impact of health reform on younger Americans.  But as with prior flawed analyses, the AP report explicitly acknowledges that it looks only at the law's 'age rating' provisions in isolation, while completely ignoring the parts of this legislation that will reduce costs and increase access for young adults.  There are critical pieces of the legislation that this so-called analysis left out.

First, a key omission from the second paragraph of the story:

“Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That's when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press. The analysis did not factor in tax credits to help offset the increase.” [Emphasis added]

An analysis that selectively omits tax credits doesn’t look at the true impact of the legislation.  The reality is that under health reform, millions of young people will be entitled to tax credits to help them afford coverage.  A young single person making roughly $43,000 or less will qualify for credits to help him or her afford coverage.  A selective analysis of the cost to young people that excludes tax credits available to them is simply inaccurate.

Second, the piece fails to mention that under health reform, young adults will have the option of purchasing a low-cost “young invincible” policy as an alternative to more comprehensive coverage.  Young adults will have the option of purchasing a lower level of coverage that meets their needs.  Those who still cannot afford coverage will qualify for a hardship waiver.  And of course, thanks to health reform, young adults will now be able to stay on their parents’ coverage until they turn 26.  As a result of health reform, young adults who previously would not have carried insurance will now have the security of knowing that they won’t be driven into debt by accident or illness as they are just starting their lives out on their own.

Finally, it’s important to take a close look at the source of some of the analyses in the story.  For example, the piece cites research done by consulting firm Milliman, Inc. – a firm that has worked for the insurance industry for years.

The bottom line is that the insurance industry will do everything within its power to fight these reforms that are going to take the power out of their hands and put it squarely in the hands of consumers.  So young adults should be sure to get the facts: health reform will make insurance more affordable for millions of Americans under the age of 30.

Linda Douglass is with the White House Office of Health Reform