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Why 20-somethings are crucial to healthcare reform

To make healthcare reform work, insurers need to bring 20-somethings into the system. But the House and Senate differ on how much to penalize people who refuse to buy health insurance.

By Tracey D. SamuelsonContributor / November 9, 2009

Ashleigh Boyer put off medical care because she didn’t have comprehensive health insurance.

Sarah beth Glicksteen/The Christian Science Monitor


Health insurance doesn't make financial sense for many young Americans.

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That's the conclusion numerous young adults come to when weighing their insurance options, with one-quarter of 19-to-29-year-olds deciding to go without health insurance.

It's also the conclusion of some researchers: Young Americans with insurance end up paying for more than they get in the current system.

Young people "are being asked ... to purchase something that isn't in their economic interest," says Anthony Schlaff, director of the Masters of Public Health program at Tufts University in Medford, Mass.

In doing so, however, they're essentially subsidizing care for older customers, and that is why young Americans are so crucial to healthcare reform efforts unfolding on Capitol Hill. Bringing in the "Young Invincibles," who so often forsake health insurance, is a crucial component in the effort to bring down healthcare costs for others.

As a result, Washington is struggling to strike a balance, making sure more Young Invincibles are insured without making that insurance a burden on a group that is typically paid less and is healthier than other Americans.

The House passed its version of a reform bill late Saturday. It included an fine of as much as $250,000 or five years in jail for people who do not get health insurance. The Senate has yet to vote on its version on the bill, but the penalties in any Senate bill are expected to be much lower. In the Senate Finance bill, for example, the penalty would gradually increase from $200 per adult in 2014 to $750 in 2017. Before 2014, there would be no fee.

Figuring out how much to shift costs to young adults is "a tricky balance," says Amy Lischko, a professor of public health at Tufts.

Why insurers want young Americans

The breakdown of medical expenses in the US shows 20-somethings' appeal to insurers and reformers trying to drive healthcare costs down: They account for 7 percent – roughly $73.5 billion – of the nation's $1 trillion in healthcare expenses, though they make up 15 percent of the population, according to a 2006 survey by the Agency for Healthcare Research and Quality (AHRQ).

That's because most young adults often do not need costly medical care or prescriptions. In fact, 27 percent of young Americans didn't have any health-related expenses in 2006.