The Affordable Care Act

[whell]

Originally Posted by bobabode

You've lost me Mike. Signing up the 'invincibles' aka lower cost class of the pool is bad?

Think of this this way:

Dad has family medical insurance coverage thought his employer, with a wife and 2 kids. Kid A is 22 and a college graduate, kid 2 is 19.

Under the pre-Obamacare rules, kid A would need to come off Dad's medical insurance once he graduates from college. Under Obamacare, Kid A can stay on Dad's plan until age 26, unless Kid A gets a job with available qualifying medical coverage.

(Hypothetical) Cost of Dad's family coverage = $1200 / month

Additional cost of adding Kid A to Dad's family coverage = $0.00

Incentive for Kid A to go get coverage though the exchange = 0%

Likelyhood Kid A gets coverage though the exchange if he can stay on dad's plan = 0 %

Likelyhood that Kid A would buy coverage to add to the 7 million needed to buy insurance by March 31, 2014 = 0%

Additional premiums paid by Kid A under new Obamacare rules to help make the exchange insurance pool sustainable / premium adequate = 0%

Now, remove the rules about kids staying on their parents plan until age 26, and you might get:

Additional cost of adding Kid A to Dad's family coverage = not an option

Incentive for Kid A to go get coverage though the exchange = +/-50%

Likelyhood Kid A gets coverage though the exchange if he can stay on dad's plan = +/-50%

Likelyhood that Kid A would buy coverage to add to the 7 million needed to buy insurance by March 31, 2014 = +/-50%

Additional premiums paid by Kid A under new Obamacare rules to help make the exchange insurance pool sustainable / premium adequate = at least the cost of a catastrophic medical plan on the exchange.

In other words, for each 19+ year old that gets coverage on their parent's plan, its one less for the exchange pool, and more premium dollars out of the pool from the critical "young and healthy group" needed to keep the exchange pool premium adequate.