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If 28-year-old Matt Bitz, a waiter in South Dakota with a college degree in English, doesn’t land a job with health benefits in the next few weeks, he will be at his computer on Oct. 1 ready to execute his plan B: buy insurance through the new health-care marketplaces that will be introduced next month.
Bitz, who has been uninsured for the last five years while working at a movie theater and his current restaurant, says he has shelled out $15,000 to $20,000 in that time to cover routine checkups as well as a handful of tests to diagnose his underactive thyroid. Far from talking about being young and free of health problems, Bitz describes the relief and peace of mind that health insurance will give him. "A very good friend of mine was diagnosed with lupus when he was 25," he says. "Things can happen."
Bitz is one of an estimated 17 million uninsured young adults who are eligible to buy coverage in marketplaces set up by the Affordable Care Act, widely known as Obamacare. The success of the legislation depends partially on whether the young and healthy -- a group that has often been stereotyped as considering themselves invincible -- sign up or pay a financial penalty: in 2014, $95 per adult or 1 percent of household income, whichever is greater, rising to $695 or 2.5 percent in 2016. (Certain people, including those who earn too little to file tax returns, are exempt from the penalty.)
This national experiment with an individual mandate has prompted the White House and advocacy groups like the Young Invincibles and Enroll America to plow lots of time and money into trying to educate people about the new law. Opponents of the law have also been aiming squarely at the young demographic, encouraging 20-somethings to stay away from Obamacare, arguing that it's not in their financial interest.
A generational backlash?
There are those like blogger Emily Zanotti, 31, who writes on the website of FreedomWorks, an organization that advocates for smaller government and lower taxes, that the marketplaces (also known as exchanges) should be avoided like "the zombie plague they are."
"The health care exchanges feed on the supple, easy-to-insure flesh of the young and virile in order to pay out all of the many expenses associated with housing, feeding, caring for and picking up after baby boomers," Zanotti says.
She cites a National Center for Public Policy Research study showing that young Americans could save about $500 per year if they opt out of the individual mandate. Zanotti lists 20 hipster items one could buy for that amount: among them five pairs of Ray Ban Clubmasters sunglasses, 27 cases of Pabst Blue Ribbon beer and 71 frozen vegan meals.
But if Massachusetts -- on whose statewide health-care program Obamacare is modeled -- is any barometer, a generational backlash against the mandatory-enrollment law seems unlikely. The proportion of uninsured 19-to-25-year-olds in the state dropped to 5 percent last year, from 27 percent in 2005. Still, it's possible that the rest of the country will not blow in the direction of highly educated, left-leaning Massachusetts.
Low awareness rates
Justine Scott, 24, a college-educated paralegal in Fort Lauderdale, Fla., who has been uninsured for six years, says she'll sign up on Oct.1. Experience with a $1,000 visit to the emergency room, as well as a background in nursing, makes buying health insurance on the exchange a no-brainer. "I'll probably pick a plan with basic coverage," says Scott.
That could cost her a few hundred dollars a month, depending on her income and health factors. According to the Henry J. Kaiser Family Foundation, a single nonsmoker making $40,000 a year whose employer does not provide health coverage would pay about $250 per month. (There are also less expensive options, including one costing $208 per month.)
"If the Affordable Care Act seems like it is a lot better quality- or pricewise, I would be willing to switch," says Michael Kelly, 27, a drummer in Brooklyn with a band called Savoy. He recently signed up for Healthy New York, which provides affordable health care to sole proprietors and small-business owners. Kelly says he will be paying about $240 a month for a plan that offers catastrophic and preventive care.
Proponents of Obamacare worry that many young people won't enroll not because of pocketbook decisions but because they're simply unaware of --or confused by -- the new options.
For many young adults, Oct. 1 will be about getting up to speed in a new language of deductibles, premiums and co-pays. The legislation allows people to select plans from their state's insurance marketplace (think Expedia.com for health insurance) or to see if they are eligible for Medicaid or subsidies for private coverage. It's terra incognita for many in this generation.
"Some of these are terms young people have never heard before," says Aaron Smith, founder of the Young Invincibles, which is based in Washington, D.C. "I think the No. 1 barrier to people signing up is going to be awareness."
Recent polling by the Commonwealth Fund, a nonprofit research group, found that only 27 percent of 19-to-29-year-olds knew about the exchanges. But the polling data suggest that once millennials find out about the law, they will be eager to seek coverage. "As young adults (ages 19–29) gain awareness of the new coverage options available in January 2014, they will eventually enroll in large numbers," the report said. (The marketplaces open next month, but coverage does not kick in until Jan. 1.)
Awareness about the health care law varies significantly, however, by education and income level. Nationwide, a third of college graduates said they were aware of the marketplaces, compared with 20 percent of those with a high-school degree or less, according to the Commonwealth Fund.
Picking the best plan
These lackluster awareness rates are why organizations like Enroll America are focusing their outreach on young adults in lower education brackets. Their field staff is meeting with young adults at beauty salons, community-college campuses and back-to-school health fairs attended by young people who have children of their own, says Jessica Barba Brown, a group spokeswoman.
Those conversations often start by sharing information on the types of services covered under the new law -- for example, maternity care and mental-health aid. Under the Affordable Care Act, 15 preventive services are free for covered individuals, including blood-pressure and cholesterol checks and Type 2 diabetes screening, and there are 22 preventive services for women that will be offered at no additional charge for those with certain plans.
To appeal to young adults, Enroll America is employing texts and tweets. Texting "covered" or, for Spanish speakers, "asegurate" to 877877 prompts Enroll America to text back information about how to begin the enrollment process in the sender's region. The group estimates that a Twitter hashtag it has been promoting -- #getcovered -- has been seen more than 2 million times since the campaign launched in June.
What's of greater concern to Smith than the prospect of young people not signing up is that many don't know how to go about picking a plan on the exchange. For example, does one choose a plan with lower premium but, say, a $7,000 deductible? Or one with a high premium because it covers the doctors you want? Like getting a driver's license, grappling with these questions may now become a rite of passage. As a result, young adults will need to become savvy consumers -- and fast.
Smith cautions against always buying the plan with the lowest monthly payments, because those often come with the highest deductibles, the out-of-pocket amount charged before insurance begins to cover costs. But Smith says he sees many young people gravitating toward that option. "I would like a plan with lower monthly premiums," says Bitz.
Then there is the issue of putting the insurance to good use, something Smith believes will be an important test of Obamacare. "Lots of young people have health insurance but don't get checkups or (start) looking for issues before they become big, major problems," he says. "That is kind of what becoming a responsible adult is about."