Affordable Health Coverage Key to Attracting Uninsured ‘Young Invincibles’
Many Young, Uninsured Adults Believe They Need Health Insurance but Question Cost
WASHINGTON , Sept. 20, 2013—Most uninsured nonelderly adults—even the so-called young invincibles—believe they need health insurance, but fewer believe coverage is now affordable, according to a new national study by the Center for Studying Health System Change (HSC).
Among uninsured adults aged 18 to 64 without access to employer coverage, only two in 10 believe they are “healthy enough” to go without health insurance, according to the study funded by the Robert Wood Johnson Foundation.
However, uninsured people are about evenly split about whether health insurance is affordable—37 percent believe “health insurance is not worth the money that it costs,” 41 percent believe insurance is worth the cost and 22 percent are uncertain, according to the study based on the 2008-2010 nationally representative Medical Expenditure Panel Survey.
Under the 2010 Patient Protection and Affordable Care Act (ACA), new federal subsidies starting Jan. 1, 2014, for lower-to-middle-income people to purchase private nongroup coverage through new health insurance exchanges may change the calculus of whether coverage is affordable for many uninsured people. A key issue for the exchanges is whether enough younger and healthier people will sign up for coverage. Without enough good risks to offset older and sicker people who are likely to jump at the opportunity to gain more-affordable coverage, the exchanges risk significant adverse selection—attracting a sicker-than-average population—that will drive up premiums, according to the study
While uninsured people who are younger, have few or no health problems, and are self-described risk-takers are more likely to believe they can go without health insurance, even a majority of these so-called young invincibles believe health insurance is important, the study found.
“The main challenge will be to convince younger and healthier people that coverage options in the new health insurance marketplaces are affordable and offer enough protection to offset the medical and financial risks of going without coverage,” said HSC Senior Fellow Peter J. Cunningham, Ph.D., coauthor of the study with Amelia M. Bond, M.H.S., a former HSC research analyst.
The study’s findings are detailed in a new HSC Research Brief—If the Price is Right, Most Uninsured—Even Young Invincibles—Likely to Consider New Health Insurance Marketplaces—available online at www.hschange.org/CONTENT/1379/. Other key study findings include:
About one-third of uninsured nonelderly adults described themselves as risk-takers, and they are more than twice as likely to believe they do not need health insurance (33.2 %) or that it is not worth the cost (51%) compared to uninsured people who are risk-averse.
Consistent with the young-invincible view, uninsured young adults aged 18 to 29 are more likely to be risk-takers compared to older uninsured adults aged 40 to 64—35.3 percent vs. 27.9 percent, respectively. Among self-described risk-takers, 38.5 percent of young adults say they do not need insurance compared to 26.6 percent of older adults. And, among the 42.5 percent of young adults who described themselves as “risk-averse,” a minority (17.5%) does not believe health insurance is important.
While more than 90 percent of young adults described their health as excellent or good, less than one in three healthy young adults (27.4%) does not believe health insurance is important. Three times as many older adults described their health as fair or poor compared to younger adults (22.5% vs. 7.9%), but more than three-fourths of older adults are in good or excellent health. And while few older adults in poor health believe that health insurance is not important, even older adults in good health have strong preferences for coverage.
Black Americans are less likely to believe they don’t need health insurance compared to whites (14.1% vs. 20.5%), and substantially fewer blacks than whites believe that health insurance is not worth the costs (25.8% vs. 41.7%). Latinos are similar to whites in terms of the percent agreeing that they don’t need health insurance, although fewer Latinos agree that health insurance is not worth the costs.
“In sum, most of the young invincibles apparently do not believe they are so invincible that they do not need health insurance, suggesting that well-targeted outreach and enrollment efforts may succeed in enrolling them in coverage,” the study concludes. “At the same time, even if older adults enroll at a much faster and higher rate than young adults, the view that this might lead to serious adverse selection and destabilize the exchanges might be overstated. For both groups, the key will be whether new coverage options available through the ACA will be perceived as affordable and worth the cost.”
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation's changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is affiliated with Mathematica Policy Research.
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Posted: September 2013