It might be harder than first thought to get younger people to sign up for health-care insurance. And it’s not just the Affordable Care Act’s exchanges they aren’t interested in.
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Automatic Data Processing Inc. (ADP), a payroll-services firm, reports the enrollment percentage of those who were eligible for insurance among large employers was relatively unchanged this year, despite the enactment of ObamaCare.
Those enrolling for health insurance through their company under age 30 fell 1.4 percentage points over the past year to 62.1%. This is also a decline of 7.6 percentage points over the past five years.
ADP analyzed data from 200 large companies and 550,000 full-time workers.
President Obama announced this week that 7.1 million Americans had selected plans on both state and federal exchanges over the six-month enrollment period. The ACA mandates every individual in the country have insurance by March 31, or they will face a fine of $95 or 1% of their annual income for failing to comply.
The administration hasn’t released a demographic breakdown of the enrollees, and the latest offering from the Department of Health and Human Services came in mid-March, which showed 25% of the then 4.2 million enrollees being between the ages of 18 and 34.
Paul Fronstin, senior research associate at the Employment Benefits Research Institute, says while the drop in participation is of note, the 60% participation rate is still high.
He says marriage could be part of the reason for the decline, Fronstin says. “People may be declining coverage because they have it elsewhere. They may get coverage from their spouse.”
What’s more, health-care reform allows those under age 26 to stay on their parents’ insurance, which is often cheaper. The Centers for Disease Control and Prevention reported that 3 million young adults have been able to gain coverage through this provision.
“Putting a 25-year-old on my plan doesn’t increase my costs,” Fronstin says. “It could make sense from a financial point-of-view for a family. Parents may be enrolling them, even without their knowledge.”
Joe Ellis, senior vice president of CBIZ, a business consulting firm, says he has seen this trend within his own clientele. A mid-sized business with 3,800 employees, 1,600 of them are on the employer-sponsored plan.
“They offer a few different plans that are relatively affordable, and we told workers they had an obligation under the Affordable Care Act that they needed to have insurance or they would face a tax penalty,” he says. “In spite of all of our work, and low premiums for people to participate, we got zero increase in participation.”
He says insurance isn’t a top financial priority to young people. “They don’t see being uninsured as a risk, and I think they are watching their pennies. A lot of it is also ignorance about the risk involved and the law itself.”