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CRUSHED BY OBAMACARE: Jeremy Oosterhouse.
Scott Strazzante/Genesis
CRUSHED BY OBAMACARE: Jeremy Oosterhouse.

Dying of old age

Healthcare | Obamacare is crushing the people it needs most—young adults

Issue: "American bounty," Nov. 30, 2013

WASHINGTON—Name just about any common problem with Obamacare and Jeremy Oosterhouse has experienced it. 

Canceled healthcare coverage? Check.

Facing higher premiums? Check.

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Oosterhouse, a youth pastor in Palos Heights, Ill., is losing his individual Blue Cross Blue Shield insurance plan at the end of the year—even though he likes it. In lieu of an operational government healthcare exchange website, the husband and father of two set out on his own to research the available insurance options. The news wasn’t good: A plan with similar coverage and higher premium takes the family deductible from $2,500 to $4,500, and if he wants a premium close to what he’s paying now, the deductible skyrockets to $12,500.

“When President Obama said if you like your plan you can keep it, I believed him,” Oosterhouse told me. 

It’s no accident that Oosterhouse, 29, is facing higher premiums: Costs are going up for most ages, but young adults, and especially males, are being hit the hardest. In the 43 states where 2014 premiums are rising, a 27-year-old faces an average premium increase of 72 percent, compared to a 44 percent average increase for a 50-year-old, according to Heritage Foundation data. That means Americans with modest incomes, growing families, and mounds of college debt are bearing the brunt of the president’s healthcare overhaul. 

The Patient Protection and Affordable Care Act (ACA) hinges on younger, healthier people enrolling to help subsidize more expensive care for older, sicklier Americans. That concept may help balance out the risk pool, but health doesn’t equate to wealth for someone like Oosterhouse, who declined his employer-sponsored insurance and purchased an individual plan to save $700 a month. He and his wife, Rachel, have always made health insurance a priority, but at a high price: They rarely go on vacations, eat at restaurants, or watch movies in the theater, and they grow their own vegetables to save on groceries. “We turn down our heat at night,” he said. “We’ve forgone savings.” 

Those measures may not be enough to survive financially under the new rules—which will likely keep Oosterhouse from qualifying for a subsidy because he declines his employer-sponsored insurance option.

Three big sources of the cost increase include new taxes, mandating unnecessary coverage, and the so-called “community rating,” which prohibits insurance companies from charging older adults more than three times as much as young adults. Joe Antos, a health policy analyst at the American Enterprise Institute (AEI), told me the natural difference in health costs between older and younger people is between 6-to-1 and 8-to-1, not the artificial 3-to-1 difference mandated in the law. 

Early returns indicate young people are avoiding the exchanges: Those who managed to sign up in the law’s first month skewed much older than the desired average age of about 40. The Wall Street Journal reported that in Connecticut and Kentucky—where state-run exchanges helped more than 8,000 people sign up in October—the average enrollee was 55 years old. The Obama administration said it expects young adults to wait until the last minute to sign up, but several experts told me if that doesn’t happen, it could result in a death spiral for the law. 

“If it turns out the people who enroll in insurance are the people who are already really sick and the people who don’t enroll are basically healthy, then that’s going to drive up premiums and will basically unravel the entire plan,” said Daniel Sledge, a health policy professor at the University of Texas at Arlington. 

Several young adults I spoke with said they gave up after trying without success to use the federal health exchange, including Melody DuVal, 30, a graphic designer in Goshen, Ind. DuVal, who hasn’t had health insurance in seven years, said she’s continued going to the doctor while she’s uninsured and is pleased with the overall care she has received. She’s had two minor surgeries this year and negotiated with her providers to cut between 30 and 83 percent from her medical bills. 

DuVal had planned to use a raise this year to help cover the cost of health insurance, but the extra cash disappeared when the payroll tax increased from 4.2 percent to 6.2 percent as part of the fiscal cliff deal in January. She said she could afford a plan with a $50 to $70 monthly premium but estimates she’ll have to pay about $300—even with a subsidy. 

“My take-home is a little over $2,000 a month, so $300 out of that is a huge chunk,” DuVal said, noting she can’t stop paying for her car, housing, or school loans, so she may have to find ways to cut down on her grocery bill. “[It’s] frustrating when you’re talking about giving up healthier food so you can have mandatory health insurance. Fruits and vegetables are more expensive than processed cheese and bread.”

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