Obamacare: A Good Deal for Young People?

Tune in all this week for our User's Guide to Obamacare special coverage starting 6pmET. The success of Obamacare and the health exchanges that opened this week hinges on one thing: Whether or not the 57 million young people under the age of 65 participate. That's because higher costs assessed to younger consumers for coverage were imposed as a way of footing the bill for older and sick Americans.  It's an open question whether this demographic will choose to buy coverage on the exchanges. With 51 percent of Americans saying they don’t have enough information about the law to understand how it will impact them and their family, we decided to fill in the gap and give the facts and figures on what younger consumers need to know about the Obamacare exchanges:

-- There is no need to rush.  Sure, the starting gun for Obamacare fired Tuesday with the opening of the exchanges, but individuals have at least three months and as much as six months to get coverage. The government doesn't requires individuals to be able to prove they have coverage until Jan. 1, 2014, but the fact is that people are allowed a "short coverage gap" of up to three months which means you can wait even longer. What's more, experts say the exchanges may not be ready for primetime. Major software glitches made it impossible in the days before the exchanges opened to reliably determine prices or subsidies, and staff was working around the clock to fix the problems. For that reason, the best strategy, if you want to see what Obamacare exchanges have in store for you, is to wait, until November or even December when, presumably, the problems will be worked out.

-- Don't bank on lower costs. Last week, the Obama administration said the average monthly premium enrollees in the exchanges will be charged is just $328. But that doesn't tell the whole story. Premiums may be lower, but your out-of-pocket costs will be higher according to analysis of the plans by health care consultant Avalere.  That company estimates that deductibles (the amount you pay out of pocket each year before your coverage kicks in) will be $2,550 up to a high of $5,000.  That average deductible is double the level of the average employer-sponsored deductible of $1,135. What's more, you may pay more for drugs, as much as 40 percent. Some experts say they expect people in their 20s and 30s to see their insurance rates rise as much as 30 percent under the Obamacare exchanges.

-- Compare apples to apples. You've no doubt heard about the thousands of "navigators" hired to advise people on choosing coverage on the exchanges.  Truth is, some states have advised navigators to stay away from directly advising people about their choices. Some of the navigators have said they hadn’t even seen the exchange offerings as late as Sunday. You could hire a broker to help, but chances are they are they may direct you to insurers paying their fees. So, it’s really on you to find the best deal. The key to doing it successfully is comparing all of the costs. Don't just focus on monthly premiums, but also consider deductible and drug costs. If you are employed and have been on a so-called “high-deductible plan” offered by 70 percent of employers, compare the details. The average deductible in an employer-sponsored plan is $3,000, higher than the average for Obamacare at $2,550, but some of the government policies will have deductibles as high as $5,000.

-- Avoid the scammers. Like all government programs promising free money, the health exchanges are drawing lots of scammers. Fake websites are bilking seniors offering to allow them access to Obamacare. Understand that access to the legitimate exchanges is free (coverage isn’t, obviously). To find your state's legitimate website, go to www.healthcare.gov. You can find out whether you are eligible for subsidies to pay for your government-sponsored coverage, go to the Kaiser Foundation's website, www.kff.org, which has a subsidy calculator. Experts say that single, young people earning less than $46,000 will be eligible for subsidies, but you may be underwhelmed by the amount you get. According to a study from the National Center for Public Policy Research, subsidies for younger consumers start phasing out at 300 percent of the federal policy level. In 11 of the 15 exchanges, taxpayer subsidies disappeared by people aged 18 to 34 before annual incomes of $34,470.