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Are you talking about health insurance this Thanksgiving?

Nov 27th, 2013

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Credit: cletch via Flickr under Creative Commons

It’s nearly turkey time, or tofurkey, for the vegetarians. No matter how you mark the occasion though, tomorrow is Thanksgiving. It’s that special American holiday for families to gather, give thanks, and make merry.

This year along with the regular traditions of overstuffed bellies and visiting with relatives, the federal government would like you to add one more course to your meal: health insurance. The Obama administration is encouraging mothers to talk health insurance with their young adult children at the Thanksgiving table.

 

20-somethings and the Affordable Care Act

When it comes to the administration’s Affordable Care Act (ACA), young adults have a vital role to play in its success. Without young, healthy folks signing up for coverage through the ACA’s new system of health insurance exchanges, the whole law could unwind.

If not enough young people buy exchange plans, the system could potentially spiral out of control as older, sicker folks enroll for coverage without the premiums from younger, healthier people to offset the cost. This would cause all health insurance prices to rise dramatically.

This possibility has been called a “death spiral” in the media. However the likelihood of that happening is fairly low at least for the first few years of the ACA. Still though, young people, the same demographic that sent President Obama to the White House twice, are necessary for the long term health of the ACA. Which of course begs the questions: Will they sign up? Can they even afford to?

 

Student loans and unemployment vs. health insurance

Chances are if you’re a member of the 20-something club (like this writer), you know the reality of this post-Financial Crisis American economy. That dream job is hard to come by, and heavily dependent on what you studied in college.

According to a study from Georgetown University, around 8 percent of recent college graduates are unemployed. For students who majored in the arts, law, public policy, and many of the social sciences, their unemployment rate is about 10 percent. However those numbers might be a bit optimistic. In a report from the Bureau of Labor Statistics (BLS), the BLS found that among 20 to 29-year-old college grads the unemployment rate overall is 12.6 percent.

Of course those aren’t catastrophic employment numbers, but don’t forget about student loans. Attending college in the United States is more expensive than it’s ever been before. Because of that, your average student is graduating with about $26,600 in student loan debt. Total student loan debt in the U.S. tops $1 trillion.

The one bit of good news is that average starting salaries for college graduates increased 2.4 percent for the class of 2013. But even with a bigger salary money can be tight between living expenses and loan payments.

 

The dilemma

So where does that leave young, uninsured adults? Many are and have been benefiting from another provision of the Affordable Care Act, since 2010. The ACA allows adult children stay on their parents’ health insurance plans until the age of 26, or 29 if you’re in New York State.

For those in that position it’s hard to imagine jumping from that relatively safe haven of parental health insurance into the exchange. Even though your average 20-something would likely qualify for a substantial subsidy at the exchange, or even be eligible for Medicaid. There are of course other reasons to be skittish of the exchange. Also, the penalty for not buying health insurance next year is very small, only $95, a lot less than buying a plan in some cases.

In truth though, you’re always going to be better off having health insurance then not having it. A single medical emergency could easily cost an uninsured patient thousands of dollars. True you might not ending up needing it, but you never know what could happen.

Even though it might hurt in the wallet, an uninsured 20-something with no other health insurance options might do well to take a look at their exchange options this Thanksgiving, or at least take a minute to thankful for their health.

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