Report: Young adults better off paying fine than enrolling in exchange

The individual mandate penalty may never adequately incentivize young adults to sign up for plans sold on health insurance exchanges, according to a new report from American Action Forum.

After analyzing data from a 2011 Medical Expenditure Panel Survey Household Component, a large-scale survey conducted by the U.S. Department of Health & Human Services, AAF found 86 percent of young adults--the consumer demographic most likely to hold the key to insurers' post reform success--will find it "financially advantageous" to pay the individual mandate fine this year instead of buying coverage through the online marketplaces.

"We're talking about a population of people who chose to go without insurance when it was much more dangerous to be without insurance and when insurance actually cost less," the study's co-author Chris Holt told The Daily Caller. "So the incentives have changed so that these folks now have less risk in remaining uninsured while the cost of getting insurance is even higher."

Even as the mandate penalty increases in 2015, a large percentage of young adults (71 percent) would still financially benefit by paying the fine instead of buying coverage. That number lowers slightly to 62 percent in 2016, the report found.

"Whether young adults make the decision to purchase health insurance will depend on many factors, but the perverse economics of the ACA discourages young adults from joining the health insurance system," the report states.

Already, HHS' own enrollment data proves this analysis true: Only 24 percent of the more than 2 million consumers who have enrolled in an exchange plan are young adults, FierceHealthPayer previously reported.

To learn more:
- here's the AAF report
- see The Daily Caller article

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