Will enough uninsured young adults sign up for health care?

When 2014 arrives, it will be the law: You must have health insurance.

But it’s unclear just how many people will abide by this basic mandate of the Affordable Care Act when it takes effect on January 1. It’s estimated that between one-half and two-thirds of currently uninsured Californians will buy in to the soon-to-be enacted system.

Scofflaws who choose to go without health insurance will have to pay a small, almost trivial fine. And while reform has been widely hailed as a remedy to America’s epidemically high health-care costs, analysts point out that the system’s effectiveness will depend upon heavy enrollment.

Young adults, they say, are the people most likely to go without health insurance under the Affordable Care Act. But, ironically, the fact that many 18- to 34-year-olds—a category sometimes dubbed the “young invincibles”—are healthy enough to live without insurance is the very reason that the new system needs them onboard.

“For the formula to work, you need these young people paying in—people who use health care at a lower frequency,” said Robert Phillips, with the Sierra Health Foundation. “That’s how to keep rates affordable.”

Overall, Phillips believes new sign-ups for health care will accelerate with the implementation of “Obamacare.” For instance, people who previously had health insurance are likely to keep themselves insured after January 1, 2014, Phillips said, as are those who become newly eligible under the new law.

But, he said, “It’s the people between 18 and 35 who we aren’t sure about.”

In Washington, D.C., there is an outreach organization called Young Invincibles that focuses on this demographic cross section. The group’s California’s policy and research tracker Linda Leu said there are about 19 million young adults in the nation who currently have no health insurance. The Affordable Care Act will make about 17 million of them eligible for free or reduced-cost health care—and Leu believes most will opt to get it.

“It’s a myth that these people don’t want health insurance,” Leu said. “The truth is, they don’t have it because it’s unaffordable.”

A June poll by the Kaiser Family Foundation found that seven out of 10 young American adults said it was very important for them personally to have health insurance. The rate was nearly 90 percent among the public overall.

Forty percent of uninsured participants said cost was the main reason they had not bought insurance. Another poll, conducted in July and August by the same group, found that 40 percent of those without insurance would not buy any even though they would be fined as a result.

That may be partly because the penalties are minimal—and certainly not enough to offset nonparticipation. The fine for the first year that one chooses not to buy health insurance will be $95, or 1 percent of a person’s annual income—whichever figure is greater. By 2016, the fine will reach a cap of $695 or 2.5 percent of one’s income.

“The fine for not enrolling is small, but it leaves you one medical emergency away from financial ruin,” noted Anthony Wright, the executive director of Health Access California, based in Sacramento. “Or you can pay a little more, and you’re covered.”

The cost of coverage under the Affordable Care Act will vary from person to person, or family to family—but it will likely reduce rates for most Americans. Leu with the Young Invincibles said that, overall, 60 percent of the nation’s 19 million uninsured young adults will be able to buy health insurance for less than $100 a month under the impending law.

Pricing will work on a sliding scale, and for 2014, the rates have been set. A person can easily estimate one’s insurance rates for the year at http://kff.org/interactive/subsidy-calculator.

For the benchmark Silver plan, referred to in most discussions and used in most calculations, the premiums will be 2 percent of a person’s income level for those making 138 percent of the federal poverty level—about $15,900 for a single person without children.

For wealthier Americans, the cost will be as much as 9.5 percent of one’s income level. For individuals making less than $15,900, Silver plan coverage will be free. There will also be three other options—Bronze, Gold and Platinum—each with its own costs and benefits.

“This is transformation,” said Wright. “We’re going from a system where you’re charged based on how sick you are to one where you’re charged based on what you can afford.”

Certainly, some Americans will decline to buy health insurance even after the Affordable Care Act kicks in. Phillips at the Sierra Health Foundation said that if 2.5 million to 3 million young, healthy Americans go this route, “affordability could become an issue.”

Wright said that in California, as many as one-half to two-thirds of uninsured people will gain health insurance during the first year that the law is in place. Several years down the road, this gap will tighten. Among people who remain uninsured, there will, Wright said, be two categories—those who simply don’t find the time to apply and enroll, and those who intentionally, actively opt to pay the fine.

Wright believes that “the vast, vast majority of Americans want health insurance.” He recognizes that political leveraging has turned health care into a political issue. Still, Wright said, “I think there will be very few people deliberately not getting covered just for the sake of not having health coverage.”