Young healthy adults face difficult decisions on health insurance

Posted Saturday, Sep. 28, 2013  comments  Print Reprints

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Helena Gudger is the type of person health insurance companies need on the books as the federal Affordable Care Act rolls out: young, relatively healthy and hungry for coverage.

The 26-year-old from Phoenix has gone four years without health insurance, using clinics and the county hospital for checkups, routine tests and gynecologist visits. She pays cash, checks prices and tries to go when doctors offer discounts.

But she is also aware that she will be in a lurch if she gets sick. She does her best to avoid crowds where she could pick up an infection and even researches the local lake for outbreaks when her friends plan an outing.

She wants to sign up for private health insurance as soon as the federal marketplace opens Tuesday.

“I know I have to plan ahead with certain events. I try to avoid crowded places where a lot of exchange of germs may transpire — I don’t want to get sick,” Gudger said. “It definitely makes you more aware of your surroundings. It’s a constant factor in the back of your mind.”

Insurance companies need young, healthy adults to buy insurance because new mandates under federal healthcare reforms mean they can no longer turn away people with pre-existing conditions or charge older people much higher premiums.

They must offer policies to all people, no matter their health, and face limits on prices for older customers.

The 20-somethings and early-30-somethings most coveted by the insurance industry have a difficult decision to make as the exchanges accept enrollment: Should they pay the $95 annual penalty for not having insurance or pay monthly premiums for coverage that might have high deductibles and out-of-pocket expenses?

Some 6 million people of various ages will pay the penalty for not having insurance next year, the Affordable Care Act’s first full year of implementation, according to the Congressional Budget Office.

Some younger people say they don’t need insurance and will opt to pay the penalty, although by 2016 the fine jumps to $695 a year or 2.5 percent of taxable income, whichever is more.

Gudger said she is not in that category. A student at two-year Phoenix College who hopes to eventually earn a four-year environmental science degree, she just started a $13-an-hour part-time job for a company selling solar panels. She has spoken with her mother about how the law will help her get insurance.

Based on her income, Gudger will qualify for federal subsidies that will pay nearly half the premium for a midpoint silver plan, which covers 70 percent of costs and includes co-pays. An online calculator created by the Kaiser Family Foundation estimates her annual premium at $3,163 and the federal subsidy at $1,434, leaving her with a premium of $1,729, or $144 a month.

Even with the subsidies, that estimated cost is higher than what she hoped to see. And because she wants a decent insurance policy, not the bare-bones coverage of cheaper plans, she’s still not sure how she’ll proceed.

“If I was to be able to be offered affordable health insurance, I would say I would probably afford anywhere between $60 and $100 a month,” Gudger said. “I wouldn’t want to pay more than $75, considering I’d have to pay for prescriptions and co-pays if I have to see a doctor.”

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