Key Obamacare provision may hamper Millenial participation

By Gabriella Morrongiello

When the President's healthcare legislation was first introduced young adults were drawn to a provision allowing them to remain on their family's health insurance plan until their 26th birthday. The popularity of that provision however, may now prove to have unintended consequences.

Last June, the Department of Health and Human Services reported that "3.1 million young adults have gained health insurance because of the health care law" and the proportion of insured adults ages 19-25 had increased "by nearly 75 percent."

With more young adults remaining on their family's plans, less will enter the exchange system Oct. 1 seeking health insurance coverage of their own. And to prevent skyrocketing premium costs, the law needs those healthy young people to sign up for coverage.

"The exchanges are built on the idea that young people will subsidize the older and sicker patients.  But I think, and others do too, that the individual plans in the exchanges are going to cost much more than the young  are going to want to pay," said Sally Pipes, invincibles President of the San Francisco-based Pacific Research Institute.

For those young adults unable to stay on a parent's plan, Pipes believes many will choose to pay the penalty of $95 or 1 percent of income beginning in 2014 rather than purchase an individual health insurance plan.

Despite the $95 penalty being far less expensive than purchasing an individual insurance plan, Department of Health and Human Services spokesperson Fabien Levy believes young adults should choose the latter.

"Thanks to the Affordable Care Act, more than 3 million young adults have been able to stay on their parent's plan, and when open enrollment begins for the Health Insurance Marketplace on October 1, young adults will be able to access new, affordable options that provide them with the care they need," Levy said.

HHS and the Administration has recently launched several initiatives aiming to encourage young adults to sign up for coverage instead of paying the penalty.

According to the White House Budget Office spokeswoman Jessica Santillo, senior administration officials met in July with a group of "actors, musicians, writers and producers, who have each expressed a personal interest in educating young people about the Affordable Care Act." Additionally, HHS launched the "Healthy Young America" video contest involving a $30,000 prize pool asking young adults to submit videos that show they're "not invincible" and therefore "need health insurance."

The Washington Post recently reported that "of the 7 million people the Obama administration expects to enroll for coverage in 2014, officials say 2.7 million need to be young adults."

While the number of uninsured young adults decreases due to the provision allowing them to remain on their parents' insurance plan, so do the Administration's chances of enrolling those 2.7 million young adults.

"Clearly there’s a large number of young people who at this point are signed up under there parent’s policy and frankly, I think that’s an important thing. But for those who aren’t covered the focus needs to be on the purpose of insurance,' said Dr. Wade Horn, former assistant secretary for the Administration for Children and Families at HHS. "We’ve got 6 months to get the message out to young people [but] I think that if young people don’t show up in droves on October 1 no one should panic."