I hated my Obamacare plans. Even with the enhanced subsidies I qualified for in 2022 my plan was still overpriced. I paid around $200 a month for coverage with a deductible of around $8,000 plus. The federal government paid between $400 and $450 a month on my behalf. The insurance company earned nearly $8,000 for insuring my health risk and paid out nothing on my behalf. The following year my coverage was even worse. The health insurer’s network was so bad that the state asked them not to return the following year. To make matters even worse an unexpected change in retirement income planning meant I no longer qualified for the enhanced subsidy. When I filed my tax return the IRS wanted around $5,000 back. Again, all my medical care that year was out-of-pocket. It was similar in 2024, but luckily, I cancelled my coverage in the 2nd quarter. When I filed my 2024 taxes, the IRS only clawed back $1,700.
It is not just me, an upper middle-aged male who is frustrated by Obamacare. Young people are also frustrated by it too. The New York Times (NYT) reports that young people dread turning 26 because they lose their parents’ health coverage and must find their own, saying:
Amid the challenges of adulthood, there is one rite of passage unique to the United States: the need to find your own health insurance by the time you turn 26.
That is the age at which the Affordable Care Act declares that young adults generally have to get off their family’s plan and figure out their own coverage themselves.
NYT estimates that 15% of 26-year-olds lose coverage and do not immediately replace it. Or they buy cheap policies that NYT pronounces as subpar, because the plans do not protect against significant medical problems that 26-year-old individuals are unlikely to encounter. One woman told NYT:
“The good news is that the A.C.A. gave young people more options,” said Karen Pollitz, who directed consumer information and insurance oversight at the Department of Health and Human Services during the Obama administration.
“The bad news is the good stuff is hidden in a minefield of really bad options that’ll leave you broke if you get sick.”
The reality is that most 26-year-olds had far better options prior to Obamacare. Today the option outside the ACA are limited. The NYT goes on to say:
Out-of-pocket expenses have soared. Complex plans in the lightly regulated marketplaces featured rising premiums, high deductibles, and requirements that patients pay a significant portion of the cost of care, often 20 percent — a charge known as coinsurance.
Seriously? My Obamacare plans were far worse, with coinsurance of 40% and a deductible of $8,000 to $10,000 depending on the plan year. More from NYT:
More than half of Americans aged 18 to 29 have incurred medical debt in the past five years, a KFF Health News data investigation found. Few have the reserves to pay it off.
What qualifies as medical debt is open for debate, but it is not just young people. Imagine how easy it is to accumulate medical debt when your best option is $750 a month for a $9,000 deductible.
NYT goes on to explain that many young people with jobs still struggle with health insurance.
Many companies, who say they can’t afford the rising costs of traditional insurance, offer their employees only a modicum of help, perhaps around $200 per month toward buying a marketplace plan, or a bare-bones company plan.
Most young people would be fine with limited benefit plans that cover a few physicians’ visits before a deductible and coinsurance. However, the ACA banned such policies. The bottom line is Obamacare made health coverage a bad deal by design. The only people who benefit are those who are poor enough to qualify for subsidies or people with pre-existing health conditions. Laws like Obamacare were initially passed in northeastern states and made coverage costly in those states too. The Commonwealth Fund, a liberal advocacy group, drafted a report nearly 20 years ago praising laws similar to the Affordable Care Act, saying they were great, but affordability remained a significant problem. I thought affordability was the problem. The Affordable Care Act made the problem worse.
Read more at New York Times: Why Young Americans Dread Turning 26: Health Insurance Chaos