Insurance (Photo credit: Christopher S. Penn)
According to data cited in a recent WSJ article (The Health-Care Overhaul: What You Need to Know), there is a specific demographic that should benefit the most from the up-coming institution of the Affordable Care Act’s changes to the healthcare system. If you’re wondering why this writing seems a bit smug, it’s because I’m one of these projected benefactors: folks between age 50 and 64.
Why is this group deemed the most likely to benefit?
It has to do with some current realities about our nation’s health and the way that the (current and proposed) health insurance marketplace works. First of all, folks in this age group who are not covered by an employer plan, or are not covered by Medicaid, must find insurance in the private marketplace. And the reality is that folks who’ve seen half a century of life or more are typically in poorer health than younger people, thus having greater need for health insurance coverage. Plus, if you’re in that age group and you find yourself unemployed, whether by early retirement or layoff, AND you have a pre-existing condition, finding health insurance at all can be nearly impossible. According to the WSJ article, in 2012 20% of this group had no health insurance at all, and up to 29% had been rejected for insurance (2008 figures).
Under the Affordable Care Act (aka, Obamacare), these folks will have access to health insurance without the possibility of denial due to health or any other reason.
Secondly, given the income caps that have been legislated and the tax credits associated, the insurance is expected to be much more affordable in the brave new world. Premiums for older adults are to be capped at no more than 3x the rate of younger policyholders.
One way that this might not work out as intended is if the younger folks (not covered by an employer plan or Medicaid) opt out of policies in favor of the tax penalty (which will eventually be the greater of $695/year or 2.5% of income). If that were to happen, the overall cost of health coverage under “marketplace” plans could skyrocket. If younger, healthier folks are opting out of insurance coverage, all that would be left in the plans would be young, unhealthy folks and the other non-covered group up to age 64 – and the cost of covering this group could be enormous.
Honestly, I don’t know what will happen, and whether anyone will actually benefit from the implementation of the Affordable Care Act. I expect that many folks will have health insurance coverage when before they didn’t, but how the costs will work out is up in the air.
What do you think? Share your thoughts in the comments section below.
