By Sharon Begley
NEW YORK (Reuters) – Korey Kormick, 29, has not had health insurance for at least a decade. His job, as a contract employee directing chess tournaments and coaching kids in the fundamentals of the game, doesn’t offer it, and he hasn’t been able to afford coverage on the individual market.
Feeling medically “invincible” – as the conventional wisdom holds 19-to-34-year-olds do – never had much to do with it. That is especially after he fell out the back of a pickup truck packed with chess equipment, breaking his arm in 13 places, on a recent trip through Alabama to a chess tournament.
“I’m looking forward to getting insurance because it hasn’t been an option up until now,” Kormick said of the new plans for 2014 coverage to be offered under President Barack Obama’s healthcare reform. “I’m just hoping the cost is reasonable.”
A new Reuters/Ipsos poll of 1,053 uninsured Americans, and detailed interviews with 51 of the respondents, shows that Kormick is not an outlier: Obamacare may attract enough of the young healthy adults it needs to buy insurance to offset the costs of covering sicker Americans and keep the system afloat financially.
While four in 10 of the uninsured of all ages support the 2010 law, according to the poll, the result indicated half of those 18 through 34 do so. Among the younger respondents, a little more than one-third have attempted to buy health insurance in the past, suggesting pent-up demand for the insurance plans to be sold through online exchanges in each state beginning October 1.
One-third of young adults in the poll said they are “very” or “somewhat” likely to buy insurance through their state’s exchange.
If half of that proportion of the nation’s young and healthy follow through, the White House would easily meet its goal of getting 2.7 million young adults – out of about 16 million uninsured 19-to-29-year-olds – to buy Obamacare insurance for 2014.
The results are part of Reuters’ ongoing online poll. Among all uninsured, the credibility interval, a measure of the poll’s accuracy, was plus or minus 3.4 percentage points.
“Contrary to commonly held beliefs, young adults do want affordable health coverage,” said Dr David Blumenthal, president of the Commonwealth Fund, a nonprofit that studies healthcare systems.
The young demographic is so pivotal to the success of Obamacare that one of the law’s fiercest opponents, the libertarian group FreedomWorks, is running a campaign on social and traditional media aimed at persuading Americans in their 20s not to buy insurance on the exchanges.
Just a few months ago, many commentators thought that would be easy. Uninsured “young invincibles,” went the thinking, would see little need to buy health coverage and would figure they had better uses for a few hundred dollars every month than paying insurance premiums.
CARROTS AND STICKS
Interviews with several dozen young adults suggest the instances where Obamacare will appeal to this group, tied to personal experience and the role of subsidies and penalties.
Lacking access to a doctor, veterinary technician April Garcia, 30, tries to diagnose herself based on what she knows about dogs and cats when she feels ill. When she had “horrible abdominal pains” recently, she ruled out appendicitis and a blocked colon, either of which could be fatal.
Because Garcia does not have insurance through her job at an animal hospital in Rockville, Maryland, she treated herself with pro-biotics for a more routine gastrointestinal upset, but was in pain for four days. She is following news about Maryland’s exchange and hopes to get coverage.
The Reuters/Ipsos poll found, as other surveys have, that a majority of the young uninsured are unaware of how the new law will affect them. But interviews with the respondents showed that many who had not heard of the exchanges or were disinclined to enroll did an about-face when presented with basic information about the new coverage.
In particular, learning that they would be fined for being uninsured in 2014 (1 percent of income, with a minimum of $95) is affecting young adults’ thinking. At the same time, a majority are expected to qualify for government subsidies to purchase coverage based on income.
Barry Mall, 34, of Mamaroneck, New York, became uninsured when he lost a warehouse job two years ago. He has not gone to a doctor or dentist since, despite toothaches and occasional minor illnesses, which he waited out or treated with whatever he could buy without a prescription.
“The idea of paying a penalty and getting nothing for it seems worse than buying it,” he said.
That fits with what researchers have found about consumer behavior. “We know from behavioral economics that people respond more to penalties than subsidies,” said economist David Dranove of Northwestern University’s Kellogg School of Management. “This kind of quirk is most apparent in situations that people aren’t used to,” which describes buying health insurance after being uninsured.
Young Invincibles, a four-year-old nonprofit that is working to enroll 18-to-34-year olds in Obamacare policies, is counting on the fear of another penalty to spur enrollment. “In talking to young men we’re emphasizing that if something goes terribly wrong (medically) they could bankrupt themselves and their family,” said Rory O’Sullivan, the group’s director of policy and research. “We’re optimistic we’ll see significant uptake by this group” in Obamacare insurance.
Young adults who are already staring into a financial abyss for medical reasons may be especially receptive to this pitch. Alex Manley, 25, of Washington, D.C., was injured in a car accident that nearly destroyed his eye nine years ago. “I need to get surgery soon,” he said. “A stitch is coming loose so it’s an open wound and it can get infected. I can’t see well.” The eye surgery, he believes, would cost $15,000 to $20,000.
To be sure, skepticism and even antipathy remains high in a country so politically divided over the law that some congressional Republicans have threatened a government shutdown rather than allowing Obamacare reforms to proceed.
Joanna Nguyen, 30, of Upper Darby, Pennsylvania, is the only one in her family without insurance: her children are insured through the government’s Children’s Health Insurance Program, and her husband has coverage through his job as a supervisor at a loan company. They can’t afford the $600 per month to cover her, too, and Nguyen opposes the healthcare law’s requirement that Americans obtain insurance.
“It’s still not going to be affordable and I don’t think we should be forced into purchasing healthcare,” she said. She doesn’t intend to buy coverage on Pennsylvania’s exchange.
Ira Barth, 24, of Dover, New Jersey, a classical music singer and special needs caretaker, last had insurance in June 2012. He isn’t sure if he will buy insurance on New Jersey’s exchange: “I want to see how affordable it is. If it’s going to be more expensive than paying for one or two doctor visits a year, I don’t know if I’ll sign on for it.”
When young adults who initially told Reuters they are unlikely to buy insurance learn for the first time about government subsidies for doing so, many re-thought their position.
People will be eligible for subsidies to defray the cost of premiums if their income is less than four times the official poverty level, or $45,960 for an individual and $94,200 for a family of four. A subsidy calculator from the Kaiser Family Foundation is available at: http://kff.org/interactive/subsidy-calculator/.
Tanya McIntyre, 29, a mother of two in Asheville, North Carolina, and her truck-driver husband just got approved for food stamps; they can’t afford a car, much less health insurance. McIntyre said she does “not agree with” the healthcare reform law’s requirement that people buy insurance. “We can barely afford to survive. Being forced to have insurance, I do not agree with that. They’re trying to force it on people who it’s their last nickel and dime.”
A family like hers will likely qualify for $8,400 in subsidies toward a $9,900 annual premium, and that might be enough to overcome her ideological objections to Obamacare. They will buy coverage on North Carolina’s exchange, McIntyre said, “if we can find one cheap enough.”
(Reporting by Sharon Begley, Lewis Krauskopf, Julie Steenhuysen and Yasmeen Abutaleb; Editing by Michele Gershberg and Leslie Gevirtz)