The following article is from the new report from Senator Tom Coburn, M.D. and Senator John Barrasso, M.D., titled "Grim Diagnosis : A check-up on the federal health law". (press release) Thus far, we have posted both the report and sections of the report. This article illustrates the impact this have on the marketplace, costs and jobs. The full report contains footnotes and references to support the content, download is below. Read on...
Much attention has been focused on how the federal health care overhaul, six months after enactment, mandates all insurance companies must allow young adults up of to age 26 to remain on their parents’ health insurance. These blanket mandates will increase health insurance costs for millions of Americans. But the relative benefits or costs of this specific provision should not obscure a larger totality: the next generation of Americans faces a grim future.
Gloomy Outlook
Government has grown rapidly in recent years, choking out progress and opportunity with increasing costs, mandates, and taxes.
A recent survey found that fewer than half of all Americans were confident that their children will have better lives than they have. Certainly, young Americans in high school and college face a bleak economic outlook on the horizon.
Less than half of Americans age 16 to 24 were employed this summer – the lowest level on record in more than six decades. Youth employment – which always rises in the summer – was roughly only half as robust as it was the previous years.
Our national debt stands at a staggering $13.6 trillion. Young adults already face a current debt burden of more than $120,000 per taxpayer.
Employer Penalty Penalizes Young Workers
Unfortunately, the future does not look much brighter. Young Americans’ financial future as taxpayers and employees is made worse by the health overhaul.
The employer penalty buried in the health overhaul will discourage hiring and reduce wages. Dr. Kate Baicker, a member of the Congressional Budget Office's (CBO) Panel of Health Advisers, noted in research that among the uninsured, Americans with the lowest levels of education are at the highest risk of losing their jobs. This means that many young adults coming out of high school and even college may be in at an increased competitive disadvantage under the law, compared to other Americans.
Health Insurance Costs Increase Even Further
Currently, about one in three Americans ages 18 to 24 does not have health insurance, despite that health insurance is the most affordable for young, healthy Americans. In Oklahoma for example, high quality, affordable health plans are available to young Americans up to age 32 for about the same monthly price as the cost of cable television and a cell phone plan.
Under the health overhaul however, premiums for young adults will spike dramatically because of newly-mandated rating rules. Beginning in 2014, new rules in the law mandate insurance companies may only charge an older person three times the premium cost they charge a younger person. This has the effect of increasing premium costs on young adults. In fact, some independent actuaries estimate that premiums for the youngest third of the population could increase by as much as 35 percent under the new law’s tight age bands.
And not only will insurance be more expensive, health care will be more expensive. The Joint Committee on Taxation has confirmed that the new health taxes included in the overhaul – on medical devices, health plans, and prescription drugs – will be passed on directly to consumers.
Faced with increased insurance and medical costs, many young adults are likely to forgo purchasing health insurance altogether. In 2014 when the individual mandate is effective, the penalty for not maintaining health insurance will only be several hundred dollars per person. Many younger, healthier Americans will make an economic decision to pay the penalty, rather than paying more for health insurance they may be unlikely to need. Unfortunately, because millions of younger, healthier Americans may not purchase health insurance and spread risk in the insurance risk pool, this will cause premiums to increase even more rapidly for those with insurance.
Indeed, the reality young adults face under the overhaul is concerning. A massive debt burden. Rising costs. Fewer jobs and labor disincentives. While the law does mandate that young adults up to age 26 be allowed to remain on their parents’ health insurance, the core elements of the legislation paint a grim future.
FULL REPORT :A Grim Diagnosis: A check-up on the federal health law
